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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Sound Energy Plc | LSE:SOU | London | Ordinary Share | GB00B90XFF12 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.016 | 2.00% | 0.816 | 0.752 | 0.882 | 0.808 | 0.75 | 0.75 | 748,501 | 16:35:09 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Crude Petroleum & Natural Gs | 0 | 4.97M | 0.0026 | 3.12 | 15.52M |
From May 2019 to May 2024
TIDMSOU
RNS Number : 6909Q
Sound Energy PLC
14 September 2017
14 September 2017
SOUND ENERGY PLC
("Sound Energy" or the "Company")
HALF YEARLY REPORT FOR THE SIX MONTHSED 30 JUNE 2017
Sound Energy, the African and European focused upstream gas company, announces its unaudited half year report for the six months ended 30 June 2017.
Half- year highlights
Morocco
Farm out of Anoual to Schlumberger for US$27.5 million carried exploration programme
TE-8 well opening Palaeozoic play
Ongoing 2D Seismic acquisition and aerial gradiometry
Corporate
Cash balance as at 30 June 2017of US$50.1 million
Strong safety record following the safe drilling of 3 complex wells
For further information please contact:
Vigo Communications - PR Tel: +44 (0)20 7830 Advisor 9700 Patrick d'Ancona Chris McMahon Alexandra Roper Sound Energy James Parsons, Chief Executive j.parsons@soundenergyplc.com Officer jj.traynor@soundenergyplc.com JJ Traynor, Chief Financial Officer Smith & Williamson - Nominated Tel: +44 (0)20 7131 Adviser 4000 Azhic Basirov David Jones Ben Jeynes RBC - Broker Tel: +44 (0)20 7653 Matthew Coakes 4000 Martin Copeland Laura White
Statement from the Chairman and Chief Executive Officer
"Having long shifted the axis of our activities to play-opening work in Eastern Morocco, Sound continues to rapidly build a Moroccan exploration-focused onshore gas business hinged on strong European gas fundamentals, a strategic partnership with Schlumberger and our multi Tcf opportunity set."
Our journey so far, including the first half of 2017, has been a busy and exciting one, encompassing all the usual highs and lows of the exploration business. Crucially, and behind the scenes, we continue to grow our core Net Asset Value in Morocco and remain hugely excited about the company's prospects over the next year or two.
Following the disappointing result at Badile the board is currently reviewing the Company's Italian portfolio. It is important to put this into context; having long shifted the axis of our activities to play-opening work in Eastern Morocco, Sound continues to rapidly build a Moroccan exploration-focused onshore gas business hinged on strong European gas fundamentals, a strategic partnership with Schlumberger and our multi Tcf opportunity set. We are clear in our goals strategically, strong financially, and on the path to firming up the very significant upside on our acreage.
So far in 2017 we have drilled three complex wells safely, re-entered Sidi Moktar with gas flared to surface to fulfil the licence commitment, secured a further US$27.5 million farm out of select Eastern Morocco licences to Schlumberger, established the deeper Paleozoic play in Eastern Morocco and, finally, secured the acquisition of Oil and Gas Investment Fund's ("OGIF") interests in Morocco.
As we look forward, the further exploration and development of our Eastern Morocco portfolio (Tendrara, Anoual and Matarka) remains the Company's absolute priority. Here the exploration potential is being de-risked by a combination of aerial gradiometry, reprocessed seismic and 2,644 Km of new 2D seismic which are all underway and fully carried by Schlumberger. It is anticipated that the Company should be ready for further hi-impact exploration drilling shortly underpinned by the recently completed OGIF transaction. Meanwhile the field development planning for the already proven volumes continues apace, most recently with the receipt of an indicative offer from AFG to fund the main pipeline. Final Investment Decision is now expected early 2018. These will be important catalysts as we continue to move the company forward and build value.
We continue steadfast in our belief that the Eastern Morocco TAGI and Paleozoic is a completely new play for our industry and one which will over the next year or two prove both the making of our company and the making of the Moroccan Oil and Gas sector.
James Parsons
Chief Executive Officer
Stephen Whyte
Non-Executive Chairman
CONDENSED INTERIM CONSOLIDATED INCOME STATEMENT
Hot Features
Premium
Six months Six months
ended ended Year
30 June 30 June ended
2017 2016 31 Dec
Unaudited Unaudited 2016
Notes GBP'000s GBP'000s Audited GBP'000s
-------------------------------------------------- ----- ---------- ---------- -----------------
Revenue 378 529 833
Other income - 715 715
Operating costs (169) (801) (1,110)
Impairment of producing assets - - (5,455)
Impairment of goodwill - - (1,704)
Exploration costs 4 (15,124) (28) (2,334)
-------------------------------------------------- ----- ---------- ---------- -----------------
Gross profit/(loss) (14,915) 415 (9,055)
Administrative expenses (5,161) (2,346) (6,241)
-------------------------------------------------- ----- ---------- ---------- -----------------
Group operating loss from continuing operations (20,076) (1,931) (15,296)
-------------------------------------------------- ----- ---------- ---------- -----------------
Finance revenue 5 37 2,717 1,364
Foreign exchange gain 759 807 1,935
Other gains and (losses)
- derivative financial instruments 182 - 583
External interest costs (116) (1,183) (3,769)
-------------------------------------------------- ----- ---------- ---------- -----------------
Profit/(loss) for period before taxation (19,214) 410 (15,183)
-------------------------------------------------- ----- ---------- ---------- -----------------
Tax credit/(expense) - - 1,744
-------------------------------------------------- ----- ---------- ---------- -----------------
Profit/(loss) for period after taxation (19,214) 410 (13,439)
-------------------------------------------------- ----- ---------- ---------- -----------------
Other comprehensive (loss)/income
Foreign currency translation income/(loss) (167) 631 375
-------------------------------------------------- ----- ---------- ---------- -----------------
Total comprehensive profit/(loss) for the period (19,381) 1,041 (13,064)
-------------------------------------------------- ----- ---------- ---------- -----------------
Profit/(loss) for the period attributable to:
Equity holders of the parent (19,381) 1,041 (13,064)
-------------------------------------------------- ----- ---------- ---------- -----------------
Basic and diluted profit/(loss) per share for the
period attributable to the equity holders of the
parent (pence) 3 (2.73) 0.08 (2.52)
-------------------------------------------------- ----- ---------- ---------- -----------------
CONDENSED INTERIM CONSOLIDATED BALANCE SHEET
As at 30 June 2017
30 June 30 June 31 Dec
2017 2016 2016
Unaudited Unaudited Audited
Notes GBP'000s GBP'000s GBP'000s
---------------------------------- ----- ---------- ----------- ----------
Non-current assets
Property, plant and equipment 1,811 6,952 1,729
Intangible assets 4 31,828 14,204 28,060
Land and buildings 1,581 1,493 1,535
---------------------------------- ----- ---------- ----------- ----------
35,220 22,649 31,324
---------------------------------- ----- ---------- ----------- ----------
Current assets
Inventories 705 327 331
Other receivables 6,087 14,147 8,777
Derivative financial instruments 2,135 - 2,545
Prepayments 201 116 320
Cash and short term deposits 38,532 14,466 46,809
---------------------------------- ----- ---------- ----------- ----------
47,660 29,056 58,782
---------------------------------- ----- ---------- ----------- ----------
Total assets 82,880 51,705 90,106
---------------------------------- ----- ---------- ----------- ----------
Current liabilities
Trade and other payables 10,649 10,028 12,604
Loans repayable in under one year 5 - 7,704 986
Provisions 4 1,406 - -
---------------------------------- ----- ---------- ----------- ----------
12,055 17,732 13,590
---------------------------------- ----- ---------- ----------- ----------
Non-current liabilities
Deferred tax liabilities 433 2,160 433
Loans due in over one year 5 17,632 9,152 16,455
Provisions 1,876 1,780 2,049
---------------------------------- ----- ---------- ----------- ----------
19,941 13,092 18,937
---------------------------------- ----- ---------- ----------- ----------
Total liabilities 31,996 30,824 32,527
---------------------------------- ----- ---------- ----------- ----------
Net assets 50,884 20,881 57,579
---------------------------------- ----- ---------- ----------- ----------
Capital and reserves
Share capital and share premium 147,371 86,868 135,667
Shares to be issued - - 223
Warrant reserve 4,090 3,209 4,459
Foreign currency reserve 1,276 1,699 1,443
Accumulated deficit (101,853) (70,895) (84,213)
---------------------------------- ----- ---------- ----------- ----------
Total equity 50,884 20,881 57,579
---------------------------------- ----- ---------- ----------- ----------
The financial statements were approved by the Board and authorised for issue on 13 September 2017 and were signed on its behalf by:
J Parsons
Director
S Whyte
Director
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Shares
Share Share to be Accumulated Warrant Foreign currency Total
capital premium issued deficit reserve reserves equity
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
---------------------------- --------- --------- --------- ----------- --------- ---------------- ---------
At 1 January 2017 6,651 129,016 223 (84,213) 4,459 1,443 57,579
---------------------------- --------- --------- --------- ----------- --------- ---------------- ---------
Total loss for the period - - - (19,214) - - (19,214)
Other comprehensive income - - - - - (167) (167)
---------------------------- --------- --------- --------- ----------- --------- ---------------- ---------
Total comprehensive income
for the period - - - (19,214) - (167) (19,381)
Reclassification on debt
settlement - - - 369 (369) - -
Reclassification on share
issue 18 205 (223) - - - -
Issue of share capital 646 10,835 - - - - 11,481
Share based payments - - - 1,205 - - 1,205
---------------------------- --------- --------- --------- ----------- --------- ---------------- ---------
At 30 June 2017 (unaudited) 7,315 140,056 - (101,853) 4,090 1,276 50,884
---------------------------- --------- --------- --------- ----------- --------- ---------------- ---------
Share Share Shares Accumulated Warrant Foreign currency Total
capital premium to be issued deficit reserve reserves equity
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
---------------------------- --------- --------- ------------- ----------- --------- ---------------- ---------
At 1 January 2016 5,039 81,276 - (71,593) 369 1,068 16,159
---------------------------- --------- --------- ------------- ----------- --------- ---------------- ---------
Total loss for the period - - - (13,439) - - (13,439)
Other comprehensive income - - - - - 375 375
---------------------------- --------- --------- ------------- ----------- --------- ---------------- ---------
Total comprehensive
income/(loss) - - - (13,439) - 375 (13,064)
Issue of share capital 1,612 50,425 - - - - 52,037
Share issue costs - (2,685) - - - - (2,685)
Shares to be issued - - 223 - - - 223
Fair value of warrants
issued with bonds - - - - 4,090 - 4,090
Share based payments - - - 819 - - 819
---------------------------- --------- --------- ------------- ----------- --------- ---------------- ---------
At 31 December 2016 6,651 129,016 223 (84,213) 4,459 1,443 57,579
---------------------------- --------- --------- ------------- ----------- --------- ---------------- ---------
Share Share Accumulated Warrant Foreign currency Total
capital premium deficit reserve reserves equity
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
----------------------------------- --------- --------- ----------- --------- ---------------- ---------
At 1 January 2016 5,039 81,276 (71,593) 369 1,068 16,159
----------------------------------- --------- --------- ----------- --------- ---------------- ---------
Total profit for the period - - 410 - - 410
Other comprehensive income - - - - 631 631
----------------------------------- --------- --------- ----------- --------- ---------------- ---------
Total comprehensive income for
the period - - 410 - 631 1,041
Fair value of warrants issued with
bonds - - - 2,840 - 2,840
Issue of share capital 53 500 - - - 553
Share based payments - - 288 - - 288
----------------------------------- --------- --------- ----------- --------- ---------------- ---------
At 30 June 2016 (unaudited) 5,092 81,776 (70,895) 3,209 1,699 20,881
----------------------------------- --------- --------- ----------- --------- ---------------- ---------
CONDENSED INTERIM CONSOLIDATED CASH FLOW STATEMENT
Six months Year
Six months ended ended
ended 30 June 31 Dec
30 June 2016 2016
2017 Unaudited Unaudited Audited
GBP'000s GBP'000s GBP'000s
--------------------------------------------------------- --------------- ---------- ---------
Cash flow from operating activities
Cash flow from operations (3,308) (704) (2,826)
Interest received 37 51 96
--------------------------------------------------------- --------------- ---------- ---------
Net cash flow from operating activities (3,271) (653) (2,730)
--------------------------------------------------------- --------------- ---------- ---------
Cash flow from investing activities
Capital expenditure and disposals (370) (470) (945)
Exploration and development expenditure (14,345) (3,173) (10,882)
--------------------------------------------------------- --------------- ---------- ---------
Net cash flow from investing activities (14,715) (3,643) (11,827)
--------------------------------------------------------- --------------- ---------- ---------
CSTI funding contract - (13) (14)
Net proceeds from debt - 5,292 10,248
Repayment of borrowings - (2,724) (5,435)
Net proceeds from equity issue 9,813 553 40,247
Interest payments (645) (461) (1,108)
--------------------------------------------------------- --------------- ---------- ---------
Net cash flow from financing activities 9,168 2,647 43,938
--------------------------------------------------------- --------------- ---------- ---------
Net (decrease)/increase in cash and cash equivalents (8,818) (1,649) 29,381
Net foreign exchange difference 541 875 2,188
Cash and cash equivalents at the beginning of the period 46,809 15,240 15,240
--------------------------------------------------------- --------------- ---------- ---------
Cash and cash equivalents at the end of the period 38,532 14,466 46,809
--------------------------------------------------------- --------------- ---------- ---------
Six months Year
Six months ended ended
ended 30 June 31 Dec
30 June 2016 2016
2017 Unaudited Unaudited Audited
GBP'000s GBP'000s GBP'000s
-------------------------------------------------------------- --------------- ---------- ---------
Cash flow from operations reconciliation
Profit/(loss) before tax (19,214) 410 (15,183)
Finance revenue (37) (2,717) (1,364)
Impairment of goodwill - - 1,704
Exploration expenditure written off and impairment of assets 15,124 - 7,789
(Decrease)/increase in accruals and short term payables (2,327) 7,104 9,035
Depreciation 331 181 272
Share based payments charge 1,205 288 819
Increase in drilling inventories (374) (327) (331)
Gain on derivative financial instruments (182) - (583)
Finance costs and exchange differences (643) 376 1,508
Decrease/(Increase) in short term receivables 2,809 (6,019) (6,492)
-------------------------------------------------------------- --------------- ---------- ---------
Cash flow from operations (3,308) (704) (2,826)
-------------------------------------------------------------- --------------- ---------- ---------
The primary non-cash transactions during the period related to the exercise of 9.6 million of 10.4p warrants in settlement of GBP1.0 million debt and issue of 830,565 shares as part settlement of the drilling services at the Badile licence, onshore Italy.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
The condensed interim consolidated financial statements do not represent statutory accounts within the meaning of section 435 of the Companies Act 2016. The financial information for the year ended 31 December 2016 is based on the statutory accounts for the year ended 31 December 2016. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
The condensed interim financial information is unaudited and has been prepared on the basis of the accounting policies set out in the Group's 2016 statutory accounts and in accordance with IAS 34 Interim Financial Reporting.
The seasonality or cyclicality of operations does not impact on the interim financial statements.
2. Segment information
The Group categorises its operations into three business segments based on Corporate, exploration and appraisal and development and production. The Group's exploration and appraisal activities are carried out in Morocco and Italy. The Group's reportable segments are based on internal reports about the components of the Group which are regularly reviewed by the Board of Directors, being the Chief Operating Decision Maker ("COMD"), for strategic decision making and resources allocation to the segment and to assess its performance. Sales during the period arose from producing licences in Italy. The segment results for the period ended 30 June 2017 are as follows:
Segment results for the period ended 30 June 2017
Development Exploration
Corporate & Production & Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
--------------------------------------------- --------- ------------- ------------ ---------
Sales and other operating revenues - 378 - 378
Operating costs - (169) - (169)
Exploration costs - - (15,124) (15,124)
Administration expenses (5,161) - - (5,161)
--------------------------------------------- --------- ------------- ------------ ---------
Operating loss segment result (5,161) 209 (15,124) (20,076)
--------------------------------------------- --------- ------------- ------------ ---------
Finance revenue 37 - - 37
Gain on derivative financial instruments 182 - - 182
Finance costs and exchange gains 643 - - 643
--------------------------------------------- --------- ------------- ------------ ---------
Profit/(loss) for the period before taxation (4,299) 209 (15,124) (19,214)
--------------------------------------------- --------- ------------- ------------ ---------
The segments assets and liabilities at 30 June 2017 are as follows:
Development Exploration
Corporate & Production & Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
-------------------- --------- ------------- ------------ ---------
Capital expenditure 609 1,202 33,409 35,220
Other assets 41,343 30 6,287 47,660
Total liabilities (18,980) (1,780) (11,236) (31,996)
-------------------- --------- ------------- ------------ ---------
The geographical split of non-current assets is as follows:
UK Italy Morocco
GBP'000s GBP'000s GBP'000s
---------------------------------------- --------- --------- ---------
Development and production assets - 1,202 -
Land and buildings - 1,581 -
Fixtures, fittings and office equipment 192 185 232
Goodwill - 433 -
Exploration and evaluation assets - 4,539 26,622
Software 88 5 141
---------------------------------------- --------- --------- ---------
Total 280 7,945 26,995
---------------------------------------- --------- --------- ---------
Segment results for the period ended 30 June 2016
Development Exploration
Corporate & Production & Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
--------------------------------------------- --------- ------------- ------------ ---------
Sales and other operating revenues - 529 - 529
Other income 715 - - 715
Operating costs - (801) - (801)
Exploration costs - - (28) (28)
Administration expenses (2,346) - - (2,346)
--------------------------------------------- --------- ------------- ------------ ---------
Operating loss segment result (1,631) (272) (28) (1,931) --------------------------------------------- --------- ------------- ------------ --------- Finance revenue 2,717 - - 2,717 Finance costs and exchange gains (376) - - (376) --------------------------------------------- --------- ------------- ------------ --------- Profit/(loss) for the period before taxation 710 (272) (28) 410 --------------------------------------------- --------- ------------- ------------ ---------
The segments assets and liabilities at 30 June 2016 were as follows:
Development Exploration
Corporate & Production & Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
-------------------- --------- ------------- ------------ ---------
Capital expenditure 274 6,678 15,697 22,649
Other assets 22,802 62 6,192 29,056
Total liabilities (11,546) (1,938) (17,340) (30,824)
-------------------- --------- ------------- ------------ ---------
The geographical split of non-current assets is as follows:
UK Italy Morocco
GBP'000s GBP'000s GBP'000s
---------------------------------------- --------- --------- ---------
Development and production assets - 6,678 -
Land and buildings - 1,493 -
Fixtures, fittings and office equipment 38 170 66
Goodwill - 2,160 -
Exploration and evaluation assets - 7,809 4,122
Software 103 8 2
---------------------------------------- --------- --------- ---------
Total 141 18,318 4,190
---------------------------------------- --------- --------- ---------
Segment results for the year ended 31 December 2016
Exploration
Development &
Corporate & Production Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
----------------------------------------- --------- ------------- ----------- ---------
Sales and other operating revenues - 833 - 833
Other income - 715 - 715
Operating costs - (1,110) - (1,110)
Exploration costs - - (2,334) (2,334)
Impairment of producing assets - (5,455) - (5,455)
Goodwill impairment - (524) (1,180) (1,704)
Administration expenses (6,241) - - (6,241)
----------------------------------------- --------- ------------- ----------- ---------
Operating loss segment result (6,241) (5,541) (3,514) (15,296)
----------------------------------------- --------- ------------- ----------- ---------
Interest receivable 1,364 - - 1,364
Gain on derivative financial instruments 583 - - 583
Finance costs and exchange gains (1,834) - - (1,834)
----------------------------------------- --------- ------------- ----------- ---------
Loss for the period before taxation (6,128) (5,541) (3,514) (15,183)
----------------------------------------- --------- ------------- ----------- ---------
The segments assets and liabilities at 31 December 2016 were as follows:
Exploration
Development &
Corporate & Production Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
------------------- --------- ------------- ----------- ---------
Non-current assets 513 1,216 29,595 31,324
Current assets 52,526 22 6,234 58,782
Total liabilities (3,161) (2,049) (27,317) (32,527)
------------------- --------- ------------- ----------- ---------
The geographical split of non-current assets is as follows:
UK Italy Morocco
GBP'000s GBP'000s GBP'000
---------------------------------------- --------- --------- --------
Development and production assets - 1,216 -
Land and buildings - 1,535 -
Fixtures, fittings and office equipment 194 171 148
Goodwill - 433 -
Exploration and evaluation assets - 8,511 18,876
Software 89 6 145
---------------------------------------- --------- --------- --------
Total 283 11,872 19,169
---------------------------------------- --------- --------- --------
3. Profit/(loss) per share
The calculation of basic profit/(loss) per Ordinary Share is based on the profit/(loss) after tax and on the weighted average number of Ordinary Shares in issue during the period. The calculation of diluted profit/(loss) per share is based on the profit/(loss) after tax on the weighted average number of ordinary shares in issue plus weighted average number of shares that would be issued if dilutive options and warrants were converted into shares. Basic and diluted profit/(loss) per share is calculated as follows:
Profit/(loss) per
Profit/(loss) after share (basic)
tax from Weighted average from continuing
continuing operations shares in issue operations
June June December June June December June June December
2017 2016 2016 2017 2016 2016 2017 2016 2016
GBP'000s GBP'000s GBP'000s million million million pence pence pence
------ --------- --------- --------- -------- -------- -------- ------ ------ --------
Basic (19,214) 410 (13,439) 703 506 534 (2.73) 0.08 (2.52)
------ --------- --------- --------- -------- -------- -------- ------ ------ --------
Weighted average Profit/(loss) per
shares in issue share
Profit/(loss) after and dilutive (diluted)
tax from potential ordinary from continuing
continuing operations shares operations
June June December June June December June June December
2017 2016 2016 2017 2016 2016 2017 2016 2016
GBP'000s GBP'000s GBP'000s million million million pence pence pence
-------- --------- --------- --------- -------- -------- -------- ------ ------ --------
Diluted (19,214) 410 (13,439) 703 538 534 (2.73) 0.08 (2.52)
-------- --------- --------- --------- -------- -------- -------- ------ ------ --------
4. Intangibles
Six months Six months Year
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
Unaudited Unaudited Audited
GBP'000s GBP'000s GBP'000s
---------------------------- ---------- ---------- ---------
Cost
At start of period 42,386 20,198 20,198
Additions 18,186 4,000 21,352
Exchange adjustments (284) 657 836
---------------------------- ---------- ---------- ---------
At end of period 60,288 24,855 42,386
---------------------------- ---------- ---------- ---------
Impairment and Depreciation
At start of period 14,326 10,634 10,634
Charge for period 13,761 17 3,559
Exchange adjustments 373 - 133
---------------------------- ---------- ---------- ---------
At end of period 28,460 10,651 14,326
---------------------------- ---------- ---------- ---------
Net book amount 31,828 14,204 28,060
---------------------------- ---------- ---------- ---------
During the period there was an impairment charge of approximately GBP13.7 million in respect of the Badile licence, Italy, following sub-commercial well results and in addition, approximately GBP1.4 million for the well abandonment costs was provided for.
5. Loans and Borrowings
Six months Six months Year
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
Unaudited Unaudited Audited
GBP'000s GBP'000s GBP'000s
---------------------- ---------- ---------- ---------
Current liability
Other loans - 7,704 986
---------------------- ---------- ---------- ---------
Non-current liability
5-year secured bonds 17,632 8,125 16,455
Other loans - 1,027 -
---------------------- ---------- ---------- ---------
17,632 9,152 16,455
---------------------- ---------- ---------- ---------
On 21 June 2016, the Company announced that Greenberry S.A ("Greenberry") had subscribed for 5-year non-amortising secured bonds with an aggregate value of the issue of EUR28.8 million (the "bonds"). Alongside the bonds, the Company was to issue 70,312,500 warrants to subscribe for new ordinary shares in the Company at an exercise price of 30 pence per ordinary share and an exercise period of approximately five years, concurrent with the term of the bonds, to Greenberry ( the "warrants"). The bonds are secured over the share capital of Sound Energy Holdings Italy Limited. The bonds have a 5% coupon and were issued at a 32% discount to par value. A total cash fee of EUR1.1 million was payable by the Company.
The warrants were recorded within equity at their fair value on the date of issuance and the proceeds of the notes net of issue costs were recorded as non-current liability. Part of the proceeds of the bonds was used to settle an existing Reserve Based Lending facility from Greenberry of EUR7.0 million at a discount of 50% reported within finance revenue. The Company also settled GBP7.0 million debt that had been issued to Continental Investment Partners in 2014. The coupon rate of 5% for the bonds ensures that the Company's on-going cash out-flow on interest payments is low and which conserves the Company's cash resources. The effective interest rate is approximately 16.3%. The 5-year secured bonds are due in June 2021.
During the period to 30 June 2017, the Company settled GBP1.0 million debt that had been issued to Simon Davies in 2014 and had an annual coupon of 10%. The debt was settled through the exercise of 9.6 million warrants at 10.4p per share.
30 June 30 June 31 December
2017 2016 2016
GBP'000s GBP'000s GBP'000s
----------------------------------- --------- --------- -----------
Liability component at 1 January 986 7,118 7,118
Interest and amortised issue costs 44 620 1,413
Interest paid (30) (306) (545)
Debt paid (1,000) - (7,000)
----------------------------------- --------- --------- -----------
- 7,432 986
----------------------------------- --------- --------- -----------
6. Shares in issue and share based payments
As at 30 June 2017, the Company had 731,514,432 ordinary shares in issue. In the period to 30 June 2016, a total of 54.2 million warrants were exercised for total proceeds of GBP9.8 million and 9.6 million warrants were exercised in settlement of a debt (note 5).
During the period to 30 June 2017, the Company granted 11.1 million share options to staff under its long term incentive plan. Approximately 3.8 million share options expired during the period.
7. Post Balance Sheet events
On 21 July 2017, the Company announced that it was progressing well with its acquisition of various licences in Eastern Morocco from OGIF (the "Acquisition") and is expecting completion of the Acquisition at the end of Q3 2017. On completion of the Acquisition OGIF will be issued with 272 million new ordinary shares in the Company which was approved by the Company's shareholders on 15 March 2017. The Company has entered into petroleum agreements with Morocco's Office National des Hydrocarbures des Mines ("ONHYM") for Anoual and Matarka licences, on shore Morocco. These agreements will come into force at the same time as completion of the Acquisition. A bank guarantee of US$2.95 million had been lodged by the Company and its partners to cover a proportion of the work commitments under the licences.
On 5 July 2017, the Company announced that the re-entry of the Koba-1 well at Sidi Moktar licence, onshore Morocco had been successfully complete and flared gas at surface. The Company expected to undertake a rigless extended well test.
On 1 August 2017, the Company announced that it had received written confirmation, from a local authority in Eastern Morocco, that preliminary approval had been provided for the proposed route of the gas export pipeline that will be necessary to transit gas from Sound Energy's Eastern Moroccan interests to the Gazoduc Maghreb Europe (GME) pipeline.
On 3 August 2017, the Company announced that it had received final approval for the Matarka Licence, which has been granted with an effective date of 27 July 2017. The Company expected to receive the remaining approvals in relation to the Anoual and Tendrara licence areas by the end of Q3 2017.
On 4 September 2017, the Company announced that it had received an indicative non-binding commercial proposal (the "Indicative Proposal") from Advisory & Finance Group Investment Bank ("AFG"). AFG is a Moroccan based financial institution which acts as fund manager to OGIF, the Company's partner in Morocco. The Indicative Proposal, subject to agreement of terms and contract, is for the provision of funding for the construction of the Tendrara Gas Export Pipeline ("TGEP") connecting Tendrara to the GME pipeline of between US$60 million and US$100 million. The Company currently estimates the gross capital cost of the TGEP pipeline to be approximately US$60 million for a 12 inch pipeline and US$100 million for a 20 inch pipeline.
On 12 September 2017, the Company announced the completion of the acquisition of various licenses in Eastern Morocco from OGIF (the "Acquisition") outline above. As a result, the Company now holds a net 47.5% position in the Tendara and Anoual petroleum agreements and Matarka reconnaissance exploration license, in exchange for 272 million new ordinary shares to OGIF.
This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKNDKOBKDKCD
(END) Dow Jones Newswires
September 14, 2017 02:00 ET (06:00 GMT)
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