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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Afentra Plc | LSE:AET | London | Ordinary Share | GB00B4X3Q493 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.20 | 0.47% | 43.20 | 43.00 | 44.30 | 43.80 | 42.60 | 43.10 | 327,034 | 16:35:19 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Crude Petroleum & Natural Gs | 0 | -9.09M | -0.0413 | -10.61 | 96.38M |
TIDMAET
RNS Number : 1897L
Afentra PLC
09 September 2021
09 September 2021
Afentra p l c
Results for the six months ending 30 June 2021
Overview
Afentra plc ('Afentra' or the 'Company'), together with its subsidiary undertakings (the 'Group'), is an upstream oil and gas company quoted on the AIM market of the London Stock Exchange.
The Company's strategy is to build an oil and gas business of scale through the acquisition of both operated and non-operated production assets and discovered resources in Africa, where its management team have extensive operational experience. Afentra is well positioned to take advantage of the energy transition and associated market dynamics which is creating opportunities for experienced operators with a strong track record to acquire quality producing assets.
The Company currently has a position in the onshore Odewayne exploration block that is operated by Genel Energy, where its 34% interest is fully carried.
Operations summary
-- Odewayne Licence - new Afentra team continue its technical assessment and outlook on block prospectivity in discussion with the operator
-- Business Development - experienced team now in place and actively pursuing potential deals in Africa, primarily focused on operated and non-operated production assets
Corporate summary
-- 18 February 2021: Several institutional and high net worth investors purchased shares sold by existing shareholders including Waterford Finance and Investment Limited (equating to its entire 29.23% shareholding in the Company) and Mistyvale Limited (equating to its entire 15.66% shareholding in the Company)
-- 16 March 2021: Paul McDade and Ian Cloke join the Board of Directors as CEO and COO respectively
-- 30 March 2021: Jeffrey MacDonald and Gavin Wilson join the Board of Directors as Independent non-executive Chairman and Independent non-executive Director respectively
-- 13 April 2021: The Company announced its intention to change its name from Sterling Energy plc to Afentra plc and adopt new articles of association. The proposed changes were approved at the General Meeting held on 30 April 2021
-- 5 May 2021: Afentra plc launched and Anastasia Deulina is appointed as Chief Financial Officer
Financial s ummary
-- Cash resources as at 30 June 2021 of $ 40.8 million (30 June 2020 of $ 43.8 million).
-- A d j usted EBI T DAX loss of $ 1.5 million (1H 2020: loss $ 289 k). -- Loss after tax of $ 2.4 million (1H 2020: loss $ 866k ).
-- The Group remains debt free and fully carried for Odewayne operations (Third and the Fourth Period).
Paul McDade, Chief Executive Officer, Afentra plc commented: "2021 has been an eventful period during which we have established Afentra plc and set the company on an exciting strategic path. The market drivers for the energy transition across Africa are presenting a wide range of compelling opportunities and we believe that our proven operating track record, focused ESG agenda, strong balance sheet and supportive shareholder base put us in a unique position to capitalise on these opportunities."
For further information contact:
Afentra plc +44 (0)20 7405 4133
Paul McDade, CEO
Anastasia Deulina, CFO
Buchanan (Financial PR) +44 (0)20 7466 5000
Ben Romney
Jon Krinks
James Husband
Peel Hunt LLP (Nominated Advisor and Joint Broker) +44 (0)20 7418 8900
Richard Crichton
David McKeown
Tennyson Securities (Joint Broker) +44 (0)20 7186 9033
Peter Krens
CEO Statement
I am pleased to provide an update on Afentra's progress in the first half of 2021, a period in which we have launched with a new name, management team and a clearly defined strategic vision. It is also a period, after the economic and industry challenges caused by the pandemic through 2020, in which we have begun to see a steady strengthening of commodity prices and cautious optimism within the sector and wider economies.
Afentra was launched in May 2021 with a clear agenda; to capitalise on opportunities presented by the accelerating energy transition in Africa and in doing so support a responsible transfer of asset ownership that provides beneficial outcomes for all stakeholders involved.
To deliver this vision, Afentra has assembled a high-quality team with a proven track record for operational excellence, commercial focus, environmental stewardship, transparent governance and delivering a positive socio-economic impact. We have ambitious plans for growth and aim to become a leading pan-African operator of scale, delivering long-term value for our shareholders through accretive transactions.
As International Oil Companies (IOCs) seek to meet the expectations of certain stakeholders to rationalise and diversify their portfolios away from carbon intensive activities, they are starting to divest parts of their African upstream assets. This is creating an opportunity rich landscape for responsible companies like Afentra. We are looking at a wide range of operated and non-operated opportunities and, with our experienced team, are well positioned as a credible counterparty for both IOCs seeking to divest assets and an experienced partner for host governments to work with.
Afentra's strong balance sheet and cost discipline also puts the company in an excellent position to review and compete for acquisition opportunities as they arise. The cash at hand also provides optionality with regards to the funding structure for any acquisitions, enabling us to consider smaller compelling opportunities without the need to raise capital.
The strengthening of the oil price is obviously welcomed by the industry, but does not alter the divestment agenda, nor does it have a material impact on the valuations or competitive landscape for our target acquisitions. It does however improve the economics of target assets which will in turn enhance the appetite within the capital markets to fund acquisitions.
Afentra is built upon an effective ESG framework. We have aligned ourselves with the UN Sustainable Development Goals (UNSDGs) and will increasingly meet the specific targets of the UNSDGs as we progress from acquisition through to operatorship and production.
At the heart of our approach is the conviction that African countries must be able to benefit from the positive socio-economic impact of their natural resources during the energy transition, while also upholding the highest possible environmental standards. We believe that it is important for all stakeholders that divested assets end up in the hands of quality operators that are committed to transparent disclosure of environmental data. Afentra believes that through strong environmental stewardship and a focused operating approach, we will be able to reduce the carbon emissions of any acquired assets over time.
With regard to our existing asset in Somaliland, we are currently progressing the technical assessment of Odewayne alongside our partner Genel. Afentra remains fully carried on this asset by Genel and we look forward to gaining a deeper understanding of the appropriate forward work program as that technical evaluation progresses through the second half of the year.
Overall, it has been a very active first half of the year for Afentra and we are making headway with our stated growth ambitions. The market drivers are gathering momentum and your company feels particularly well placed to capitalise on the array of upstream opportunities that will be presented as a result of the energy transition across Africa. We remain patient in our approach and believe we have put in place all the required building blocks to deliver long-term value. We thank our shareholders for their support and look forward to delivering positive outcomes for all our stakeholders through the second half of the year and beyond.
Operations Review
Somaliland
Somaliland offers one of the last great opportunities to target an undrilled onshore rift basin in Africa. The Odewayne block, with access to Berbera deepwater port less than a 100km to the north, is ideally located to commercialise any discovered hydrocarbons. The company has continued to work the reprocessed 2D seismic survey along with field data and legacy geological field studies to determine if a Mesozoic age sedimentary basin is present in the block and its prospectivity.
Odewayne (W.I. 34%) Exploration block
Overview
This large, unexplored, frontier acreage position covers 22,840km2, the equivalent of c. 100 UK North Sea blocks. Exploration activity prior to the 2017 regional 2D seismic acquisition program has been limited to the acquisition of airborne gravity and magnetic data and surface fieldwork studies, with no wells drilled on block.
The Company's wholly owned subsidiary, Afentra (East Africa) Limited ('A(EA)L'), holds a 34% working interest in the PSA (fully carried by Genel Energy Somaliland Limited for its share of the costs of all exploration activities during the Third and Fourth Periods of the PSA). The Odewayne production sharing agreement is in the Third Period, with a 1,000km, 10km by 10km 2D seismic grid acquired in 2017 by BGP. The Third Period has been further extended, through the 8th deed of amendment. This data was reprocessed in 2019 and is currently being reviewed after the disruption caused by Covid in 2020-21.
In 2H 2021 the Company will review the reprocessed 2D seismic data set and will update its technical assessment and outlook on block prospectivity accordingly. Alongside the seismic reprocessing review, the Operator is undertaking a number of work streams and it is anticipated that these will aid the JV partnership in developing an appropriate forward work program to further evaluate the prospectivity of the licence.
Outlook on buy and build strategy
In March 2021 the Company shifted focus to support a responsible energy transition in Africa by establishing itself as a credible partner for divesting IOCs and Host Governments. The Company is specifically targeting producing assets and discovered resources in Africa. The focus will be on operated positions but will also consider non-operated positions alongside credible operators with shared standards and within a joint venture where we can leverage our operating experience to influence outcomes and add value to operator plans. The Company has developed a rigorous ESG agenda which is being utilised in the screening process to ensure any acquisition opportunities meet our risk criteria and provide scope to reduce emissions through focused operational excellence.
An experienced technical and commercial team, of staff and consultants, with deep knowledge of the West African region has been assembled and is screening a number of opportunities.
Financial Rev iew
Selected financial data
1H 2021 1H 2020 FY 2020 Cash and cash equivalents net to Group ($m) 40.8 43.8 42.7 --------------------------------------------- -------- -------- -------- Adjusted EBITDAX (1) ($m) (1.5) (0.3) (0.8) --------------------------------------------- -------- -------- -------- Loss after tax ($m) (2.4) (0.9) (1.9) --------------------------------------------- -------- -------- -------- Debt ($m) - - - --------------------------------------------- -------- -------- -------- NAVPS (2) (at period end) (GBP pence) 20.2 23.9 21.3 --------------------------------------------- -------- -------- -------- Share price (at period end) (GBP pence) 15.0 11.5 9.4 --------------------------------------------- -------- -------- --------
(1) Adju s t ed EBITDAX is cal c u lat ed as earnings be f ore int ere s t, taxat i on, depreciation, amor t i sat i on, impa i r m ent, pr e - l i cence expend i tur e, pr ov isio ns and shar e -ba s ed pa y m ents.
(2) Net asset value per share
Loss from operations
T he loss from operations for 1H 2021 was $2.5 million (1H 2020: loss $1.1 million) for the reasons described below.
During the period, net administrative expenditure increased to $2.5 million (1H 2020: $1.1 million) as a result of exceptional (one off) items relating to costs associated with the migration to Afentra, a change in management and an increase in contractors and advisors. Pre-licence costs for 1H 2021 was $862k (1H 2020: $716k).
Adjusted EBITDAX and loss after tax
A d j usted EBI T DAX totalled a loss of $1.5 million (1H 2020: loss $289k).
Finance inco me of $46k r epre sents inter est r e c eived ($11k) and foreign exchange gains ($35k) on cash h eld by the Group (1H 2020: $288k).
Finance costs totalled $ 23k (1H 2020: $ 56k).
T he loss after tax totalled $ 2.4 million (1H 2020: loss $ 866k ). Basic loss per share was 1.11 USc per share ( 1H 2020: 0.39 USc loss per share ). No dividend is propos ed to be paid for the six months to 30
June 2021 (30 June 2020: nil).
Cash flow
Net cash outflow from operating activities (pre -working capital move ments) totalled $2.3 million (1H 2020: outflow $988k ). A fter working capital, net cash outflow from operating activities totalled $ 1.8
million (1H 2020: outflow $ 1.2 million).
Statement of financial position
At 30 June 2021, Afentra held $40.8 million cash and cash equivalents available for its own use (30 June 2020: $43.8 million).
Group net assets at 30 June 2021 were $61.4 million (30 June 2020 were $64.9 million). Non-current assets totalled $22.0 million (30 June 2020: $22.0 million) with net current assets reducing to $40.1 million (30 June 2020: $43.7 million).
Going Concern
T he Group's business activitie s, togeth er with the factors likely to af f ect its future de v elop ment, performance and position are s et out in the CEO State ment and in the Op erations Re vie w. The financial position of the Group is de scribed in the Financial R e vie w.
T he Co mpany has s u fficient cash re sources for its working capital needs for at l east the n e xt 12 months. As a cons equence, the Dir ectors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. This assessment has been made by the Directors who remain confident the group has sufficient cash resources to meet its liabilities as they fall due for a period of at least 12 months from the date of signing these financial statements, and notwithstanding the impact that Covid-19 has had internationally. The Directors believe that the Group is in a strong position to absorb any potential impact on the Group arising from Covid-19. Accordingly, th ey continue to adopt the going concern basis in preparing the re sults for the s ix months ended 30 June 2021.
Disclaimer
T his document contains ce r tain forward-looking statements that are subj ect to the usual risk factors and uncertainties associated with the oil and gas e xploration and production busines s. Whilst the Group beli e v es the e xpectation re flected he r ein to be reasonable in light of the information available to it at this time, the actual outcome may be materially diff erent owing to factors eith er beyond the Group's control or oth erwise within the Group's control but where, for e xample, the Group decides on a change of plan or strategy. Acco rdingly, no reliance may be plac ed on the figures contained in such for ward -looking statements.
Glossary
$ US Dollars 2D two dimensional ------------------------------------------------------ Adjusted EBITDAX earnings before interest, taxation, depreciation, amortisation, impairment, pre- licence expenditure, provisions and share based payments ------------------------------------------------------ AIM Alternative Investment Market of the London Stock Exchange ------------------------------------------------------ Group Afentra plc, together with its subsidiary undertakings (the 'Group') ------------------------------------------------------ km kilometre ------------------------------------------------------ NAVPS Net asset value per share ------------------------------------------------------ Petrosoma Petrosoma Limited (JV partner in Somaliland) ------------------------------------------------------ PSA production sharing agreement ------------------------------------------------------ Seismic Geophysical investigation method that uses seismic energy to interpret the geometry of rocks in the subsurface ------------------------------------------------------ km(2) square kilometre ------------------------------------------------------ WI working interest ------------------------------------------------------
Condensed consolidated income statement for the six m onths to 30 June 2021
Restated Six months Six months to to Year ended 30th June 30th June 31st December 2021 2020 2020 $000 $000 $000 (unaudited) (unaudited) (audited) ------------------------------------------- ------------------------------------------- ------------------------------------------- Other administrative expenses (1,605) (382) (953) Pre-licence costs (862) (716) (1,221) ------------------- ------------------------------------------- ------------------------------------------- ------------------------------------------- Total administrative expenses (2,467) (1,098) (2,174) Loss from operations (2,467) (1,098) (2,174) Finance income 46 288 326 Finance expense (23) (56) (58)
Loss before tax (2,444) (866) (1,906) Tax - - - Loss for the period attributable to the owners of the parent (2,444) (866) (1,906) ------------------------------------------- ------------------------------------------- ------------------------------------------- Other comprehensive expense - items to be reclassified to the income statement in subsequent periods Currency translation adjustments (5) 6 7 Total comprehensive (expense)/income for the period (5) 6 7 ------------------------------------------- ------------------------------------------- ------------------------------------------- Total comprehensive expense for the period attributable to the owners of the parent (2,449) (860) (1,899) =========================================== =========================================== =========================================== Basic and diluted loss per share (US cents) (1.11) (.39) (.87)
Condensed consolidated statement of financial position as at 30 June 2021
Restated As at As at As at 30th June 30th June 31st December Note 2021 2020 2020 $000 $000 $000 (unaudited) (unaudited) (audited) ------------ ---------------------------------------- -------------- Non-current assets Intangible exploration and evaluation assets 3 21,252 21,142 21,209 Property, plant and equipment 746 848 844 21,998 21,990 22,053 ------------ ---------------------------------------- -------------- Current assets Trade and other receivables 228 148 193 Cash and cash equivalents 40,772 43,798 42,674 41,000 43,946 42,867 ------------ ---------------------------------------- -------------- Total assets 62,998 65,936 64,920 ============ ======================================== ============== Equity Share capital 28,143 28,143 28,143 Currency translation reserve (202) (198) (197) Retained earnings 33,501 36,985 35,945 Total equity 61,442 64,930 63,891 ------------ ---------------------------------------- -------------- Current liabilities Trade and other payables 825 178 209 Lease liability 120 98 205 945 276 414 ------------ ---------------------------------------- -------------- Non-current liabilities Lease liability 576 700 581 Long-term provision 35 30 34 611 730 615 ------------ ---------------------------------------- -------------- Total liabilities 1,556 1,006 1,029 ------------ ---------------------------------------- -------------- Total equity and liabilities 62,998 65,936 64,920 ============ ======================================== ==============
Condensed consolidated statement of changes in equity for the six months ended 30 June 2021
Currency Share translation Retained capital reserve earnings Total $000 $000 $000 $000 --------------------- ------------ --------- -------- At 1 January 2020 28,143 (204) 37,851 65,790 ------------------------------- --------------------- ------------ --------- -------- Total comprehensive expense for the period attributable to the owners of the parent - 6 (866) (860) --------- At 30 June 2020 - restated 28,143 (198) 36,985 64,930 ------------------------------- --------------------- ------------ --------- -------- Total comprehensive expense for the period attributable to the owners of the parent - (1) (1,040) (1,039) At 31 December 2020 28,143 (197) 35,945 63,891 ------------------------------- --------------------- ------------ --------- -------- Total comprehensive expense for the period attributable to the owners of the parent - (5) (2,444) (2,449) At 30 June 2021 28,143 (202) 33,501 61,442 ------------------------------- --------------------- ------------ --------- --------
Condensed consolidated statement of cash flows for the six months ended 30 June 2021
Restated Six months Six months to to Year ended 30th June 30th June 31st December Note 2021 2020 2020 $000 $000 $000 (unaudited) (unaudited) (audited) ------------ ------------------------------------------- -------------- Operating activities: Loss before tax (2,444) (866) (1,906) Depreciation, depletion & amortisation 119 166 193 Finance income and gains (46) (288) (326) Finance expense and losses 23 - 59 ------------ ------------------------------------------- -------------- Operating cash outflow prior to working capital movements (2,348) (988) (1,980) (Increase)/decrease in trade and other receivables (35) 84 57 Increase/(decrease) in trade and other payables 616 (262) (230) Increase in provision 1 - 4 Net cash outflow from operating activities (1,766) (1,166) (2,149) Investing activities
Interest received 11 284 326 Purchase of property, plant and equipment (9) - (12) Exploration and evaluation costs 3 (43) (23) (90) Net cash (used)/generated from investing activities (41) 261 224 Financing activities Principal paid on lease liability (121) (108) (237) Interest paid on lease liability (20) (29) (46) Net cash used in financing activities (141) (137) (283) Net decrease in cash and cash equivalents (1,948) (1,042) (2,208) Cash and cash equivalents at beginning of period 42,674 44,851 44,851 Effect of foreign exchange rate changes 46 (11) 31 Cash and cash equivalents at end of period 40,772 43,798 42,674 ============ =========================================== ==============
Notes to the consolidated results for the six months ended 30 June 2021
1. Basis of preparation
T he financial information contained in this announcement does not constitute statutory financial statements within the meaning of S ection 435 of the Co mpanies Act 2006.
T he financial information for the six months ended 30 June 2021 is unaudited. In the opinion of the Directors, the financial information for this period fairly repre s ents the f inancial position of the Group. R e sults of operations and cash flo ws for the period are in compliance with International Financial Reporting Standards (IFRSs). T he accounting policie s, e stimat es and judg e ments applied are consistent with those disclos ed in the annual financial statements for the year ended 31 De c e mber 2020. The se financial statem ents should be read in con junction with the annual financial statem ents for the year ended 31 De c em b er 2020.
The financial information for the six months ended 30 June 2020 has been restated as a consequence of an IFRS 9 adjustment by the Group.
A ll financial information is pres ented in USD, unle ss oth erwise disclos ed.
An unqualified audit opinion was expressed for the year ended 31 December 2020, as delivered to the Registrar.
The Directors of the Company approved the financial information included in the results on 09 September 2021.
2. Results & dividends
T he Group has r etained earnings at the end of the p eriod of $33.5 million (30 June 2020: $37.0 million r etained earnings) to be carried forward. The Directors do not recom mend the paym ent of a dividend (1H 2020: nil ).
3. Intangible exploration and evaluation (E&E) assets Total $000 (unaudited) ------------ Net book value at 31 December 2019 21,119 ------------ Additions during the period 23 Net book value at 30 June 2020 21,142 ------------ Additions during the period 67 Net book value at 31 December 2020 21,209 ------------ Additions during the period 43 Net book value at 30 June 2021 21,252 ------------
Group intangible assets:
Odewayne PSA, Somaliland: SE(EA)L 34%, Genel Energy Somaliland Limited 50%, Petrosoma 16%
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IR DZGGLLRMGMZM
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September 09, 2021 02:00 ET (06:00 GMT)
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