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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Barryroe Offshore Energy Plc | LSE:BEY | London | Ordinary Share | IE00B66B5T26 | ORD EUR0.001 (CDI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.575 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2022 to Apr 2024
TIDMBEY
RNS Number : 3497B
Barryroe Offshore Energy PLC
30 September 2022
2022 Half Year Results
Dublin and London - 30(th) September, 2022
Barryroe Offshore Energy (AIM and Euronext Growth: "BEY"), the Irish based energy company, today announces its unaudited interim results for the half year ended June 30, 2022.
Alan Curran, Interim Chief Executive, Barryroe Offshore Energy said :
"As Ireland grapples to define a secure energy transition plan in the face of the West's economic war with Russia, the Barryroe Field presents a unique opportunity to develop an indigenous source of oil and gas. Successful development of the Field will not only contribute to Ireland's energy security and transition to a carbon neutral economy, but will also create significant employment opportunities and provide strategic and fiscal value to the Irish economy, at no cost to the Irish taxpayer.
Our successful summer fundraising confirmed the strength of our shareholder base and support for the company's strategy. We await the long anticipated regulatory consent for the Lease Undertaking, which will unlock our plans and commitments for the essential appraisal prior to development of the Barryroe Field".
2022 OPERATIONAL AND FINANCIAL HIGHLIGHTS
Operational
-- Barryroe, North Celtic Sea (SEL 1/11)
o In February 2022, the Board announced the full results of its strategic review.
o Continued efforts to secure regulatory consent for the Lease Undertaking, without which the planned appraisal well cannot proceed.
Financial
-- Operating Loss for the period of EUR0.947 million versus EUR1.065 million in 2021.
-- Loss for the period of EUR2.345 million versus a profit of EUR1.628 million in 2021. The figure to 30 June 2022 included a net non-cash expense in relation to warrants of EUR1.293 million, versus a net non-cash gain of EUR3.155 million in 2021.
-- Basic loss per share was EUR0.24 cents versus earnings of EUR0.18 in 2021. -- Diluted loss per share was EUR0.21 cents versus earnings of EUR0.14 in 2021.
-- At 30 June 2022, total cash and cash equivalents were EUR2.188 million versus EUR3.645 million at 30 June 2021.
-- The Company had no bank or bond debt as at 30 June 2022.
-- In June 2022, the Company raised gross proceeds of $1.8 million (equivalent to approximately GBP1.5 million) through the subscription for 45,312,316 Placing Securities and 51,686,693 Subscription Securities (each of which comprised one New Ordinary Share and one STG1.5 Warrant). The issue of the Warrants was approved by shareholders at the AGM in July 2022. The warrants are exercisable up to the 26 July 2023.
-- The GBP0.09 warrants expired on the 6 May 2022. No GBP0.09 warrants were exercised before they expired.
2022 YEAR TO DATE IN REVIEW
Governance Changes
In July 2022, Alan Curran was appointed Interim Chief Executive and James Menton resumed the role of Non-Executive Chairman. On 25(th) August 2022, James Menton announced that he would stand down as Chairman and leave the Board within the following 90 days.
Strategy
Since the Board was reconstituted in July 2021, we have adopted a realistic and pragmatic approach to the formulation of our Barryroe Strategy. The Board continues to give careful regard to the dynamics of the current regulatory environment and the energy transition issues of security of supply, growing energy demand and the continuing need to attract foreign direct investment as Ireland progresses securely towards carbon neutrality by 2050. The Board's key near term objectives and priorities remain as follows:
-- Follow-up and engagement with the GeoScience Regulation Office (GSRO) in relation to the application for the Lease Undertaking.
-- Ensuring that the Company has the breadth and depth of experience, competency and skills within the technical team to support the Board in the formulation and delivery of the Barryroe Strategy.
-- Enhancing the understanding of the Barryroe Project and the opportunities it presents for shareholders and all other key stakeholders.
The Barryroe Lease Undertaking - Status
Prompt regulatory granting of the Barryroe Lease Undertaking remains fundamental to the execution of the Board's strategy. Securing the Lease Undertaking continues to be the Board's main focus.
Since August 2021, the Board has proactively and repeatedly engaged with the GeoScience Regulation Office (GSRO) and the Minister for the Environment, Climate and Communications (DECC), expressing a sense of urgency over the granting of the Lease Undertaking. The Board has also engaged with a number of other key stakeholders, including public representatives, in order to move the DECC/GSRO review process forward. Despite these efforts, a decision on the Lease Undertaking is still outstanding.
In the Board's view, there is no reasonable justification for the ongoing delay. The Board believes that all required technical and financial information in relation to the Barryroe Lease Undertaking has been submitted to the GSRO. The Board is confident that the Barryroe Field offers a highly valuable resource that, at no cost to the State, could contribute to:
-- Ireland's energy security over the next decade. -- Ireland's energy transition to a carbon neutral economy. -- carbon reduction through import substitution. -- significant job creation and tax contributions.
Irish Government Policy and Barryroe
In September 2019, the Irish Government affirmed that all existing licences, which included Barryroe, would be allowed to run their full term. It should be firmly understood that Barryroe is a discovered oil and gas field, not a wildcat prospect, in relatively shallow waters not far off the coast of Cork. It requires an appraisal well to be drilled to confirm the reservoir and hydrocarbon characteristics before a phased development can be initiated. That well can be progressed only once the Lease Undertaking is issued.
It is our view that the potential offered by the successful exploitation of the Barryroe Field would be an important element in the execution of Government policy, as enunciated by the Department of the Environment, Climate and Communications' (DECC) "Policy Statement on Security of Electricity Supply" (November 2021) and Section 3.7 of the "National Risk Assessment 2021/2022 - Overview of Strategic Risk".
Current Government policy does not restrict Ireland's use of hydrocarbon fuels; it merely precludes new oil and gas exploration in Irish waters. The Board believes that the Irish Government's delay in allowing progress on existing oil and gas licences adds unnecessarily to the risk of energy shortages.
The Case for Barryroe
Geopolitical Challenges
The war in Ukraine has re-emphasised the value of national self-sufficiency across the whole range of primary energy sources. As Ireland moves towards a much bigger share of renewable sources, through the transition to net-zero carbon by 2050, there will be an ongoing, albeit diminishing, level of residual demand for oil and gas to meet Ireland's energy consumption needs. The impact of rising imported energy prices, and the growing potential for significant interruption to imported energy supplies, is currently a key focus for all Governments throughout Europe.
Energy Security and Vulnerability
The Economic and Social Research Institute (ESRI) recently ranked Ireland as the fourth-most energy insecure country in Europe. Currently, Ireland imports 70% of its gas needs through two interconnectors running from Scotland to Ireland. The remaining 30% comes from the Corrib Field, which is expected to be depleted by the end of the decade.
Ireland's reliance on the UK for the bulk of its gas supply puts the country in an extremely vulnerable position. Following Brexit, Ireland is no longer compliant with the EU's requirements for energy security, according to the Commission for Regulation of Utilities (CRU). Ireland's gas import infrastructure runs through the UK, a "third country". Ireland has a unique opportunity to harness its own supply of oil and gas by enabling appraisal and development of the Barryroe Field. Not to do so would, in the Board's view, have a detrimental impact on resilience through the coming decade of Ireland's energy transition and would represent a very significant missed opportunity from a strategic, fiscal and energy security perspective.
The Department of the Environment, Climate and Communications published its report on the security of energy supply to Ireland's Electricity and Natural Gas Systems on 19(th) September 2022. The Company will engage in the consultation process, with submissions due by 28(th) October 2022.
Energy Transition - The Need for Barryroe
Ireland has a clear goal of being carbon neutral by 2050 and we acknowledge that expanding renewable sources of energy must be the main focus in the years ahead. Barryroe is a confirmed oil and gas field. With contingent and prospective in place gas resources in excess of 1tcf, it has the potential to contribute significantly to Ireland's gas balance over the next 10 to 15 years.
Furthermore, most of Ireland's transport options, particularly freight transport and aviation, currently run on oil, all of it imported. Transitioning completely away from oil will not happen overnight. Successful optimisation of the Barryroe Field can contribute significantly to meeting Ireland's energy demand during the transition over the coming decade, without prejudicing achievement of a carbon neutral economy in Ireland by 2050.
Environmental Benefits - Carbon Reduction Through Import Substitution
The relative benefits of indigenous sources of energy are significant. For example, gas produced in Ireland results in up to 30% lower carbon emissions than gas from outside Europe. This is due to a combination of more efficient production technologies, and less energy expended due to shorter pipeline transport (given that long distance pipeline transport requires pumping booster stations).
Technical Strategy
Earlier this year, the completion of our strategic review along with the Competent Persons Report (CPR) confirmed a core area "base case" of 81.2 MMstb of Gross 2C oil resources that can be accessed through an initial two-phase development project, initially addressing just one reservoir in the central core segments of the Field. The CPR, which remains consistent with the 2013 whole field assessment, confirmed a Net Present Value (NPV) of $401m to Barryroe Offshore Energy's interest in this initial project only, based on a 10% discount factor and a $70 Brent oil price. The initial development project is predicated on the outcome of appraisal drilling to confirm the reservoir and hydrocarbon phase characteristics in the key Basal Wealden A Sands and the lateral extent of the shallower C Sands, with up to 400 bcf of gas resource in place. The initial project will advance the potential for further development of other Barryroe reservoirs, including those holding its discovered and prospective in place gas resources in excess of 1 tcf.
The technical strategy for the Barryroe Field is primed for implementation within a short timeframe. Subject to regulatory consent for the Lease Undertaking, the Board is seeking to proceed with appraisal drilling as soon as practicable. In expectation of a timely and satisfactory outcome, the Board intends to proceed to a phased development leading to first production in late 2026. The Company urgently requires a positive decision on the Lease Undertaking in order to ensure that the Barryroe Field can soon begin to play a key role in Ireland's energy future.
Share Placing - June 2022
In June 2022, the Company raised gross proceeds of $1.8 million (equivalent to approximately STGGBP1.5 million) through the subscription for 45,312,316 Placing Securities and 51,686,693 Subscription Securities (each of which comprised one New Ordinary Share and one STG1.5p Warrant). The issue of the Warrants was approved by shareholders at the AGM in July 2022. The Board is thankful of the continuous, consistent support of its shareholders to develop the Barryroe Field.
Name Change - Barryroe Offshore Energy
The Company indicated in its annual results for 2021 that it intended to change its name to Barryroe Offshore Energy. The Board believes the new name properly reflects the focus of the company and serves as a reminder of the underlying potential of its primary asset, as part of Ireland's secure energy transition. To achieve this, an extraordinary resolution was included at the AGM held on 27(th) July and was duly passed by shareholders. The name change became effective from 27(th) September. It is important to note that there is no underlying change to the value or number of existing shares held by shareholders. The new ticker for both the AIM and Euronext market is BEY.
The Future
The Board is keenly aware of the global climate challenge, which has been exacerbated by an energy security crisis as a result of the war in Ukraine. The impact of rising energy prices, and the potential for significant interruption to energy supplies, is a focus for governments throughout Europe. The challenges we face are stark and disruption to energy supplies could lead to severe economic and social impacts.
It is a strategic imperative that Irish Government policy allows for pragmatism with regard to energy policy. Ireland is now at a critical juncture in planning for its energy future, though it is very widely accepted that Ireland will continue to require oil and gas to supplement available renewable sources for decades to come.
Investor Enquiries:
o Barryroe Offshore Energy P.l.c. Tel: 353 1 219 4074
Alan Curran
Chief Executive
o Investor Relations Tel: 353 1 2194074
Job Langbroek
o J & E Davy Tel: 353 1 679 6363
Anthony Farrell
Media Enquiries:
o AM O'Sullivan PR Tel: 353 87 9881890 / tina@amosullivanpr.ie
Tina Quinn
BARRYROE OFFSHORE ENERGY P.l.c.
Condensed consolidated income statement
For the 6 months ended 30 June 2022
Hot Features
Premium
Notes 6 months 6 months Year ended
ended 30 ended 30 31 December
June 2022 June 2021 2021
Unaudited Unaudited Audited
EUR'000 EUR'000 EUR'000
Continuing operations
------ ----------- ----------- -------------
Administration expenses 2 (947) (1,065) (2,369)
------ ----------- ----------- -------------
Operating loss (947) (1,065) (2,369)
------ ----------- ----------- -------------
Finance income 3 - 3,765 6,699
------ ----------- ----------- -------------
Finance expense 4 (1,398) (1,072) (888)
------ ----------- ----------- -------------
(Loss)/profit before
income tax (2,345) 1,628 3,442
------ ----------- ----------- -------------
Income tax expense - - -
------ ----------- ----------- -------------
(Loss)/profit for the
period (2,345) 1,628 3,442
------ ----------- ----------- -------------
(Loss)/profit per share
(cent)
------ ----------- ----------- -------------
Basic (loss)/profit
per share 11 (0.24) 0.18 0.36
------ ----------- ----------- -------------
Diluted (loss)/profit
per share 11 (0.21) 0.14 0.30
------ ----------- ----------- -------------
The total recognised (loss)/profit for the period is entirely attributable to equity holders of the Company.
The accompanying notes are an integral part of these condensed consolidated financial statements.
BARRYROE OFFSHORE ENERGY P.l.c.
Consolidated statement of comprehensive income
For the 6 months ended 30 June 2022
Notes 6 months 6 months Year ended
ended 30 June ended 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
EUR'000 EUR'000 EUR'000
(Loss)/profit for the
financial period (2,345) 1,628 3,442
--------------- --------------- -------------
OCI Items that may be
reclassified into profit
or loss
------- --------------- --------------- -------------
Foreign exchange translation
differences 5,918 1,930 4,982
--------------- --------------- -------------
Total income recognised
in other comprehensive
income from continuing
operations 5,918 1,930 4,982
--------------- --------------- -------------
Total comprehensive
income/(expense) for
the period 3,573 3,558 8,424
--------------- --------------- -------------
The total comprehensive income/(expense) recognised for the period is entirely attributable to equity holders of the Company.
The accompanying notes are an integral part of these condensed consolidated financial statements.
BARRYROE OFFSHORE ENERGY P.l.c.
Consolidated statement of financial position
As at 30 June 2022
Notes 30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
EUR'000 EUR'000 EUR'000
Assets
------ ----------- ----------- ------------
Exploration and evaluation
assets 5 73,529 62,723 66,983
------ ----------- ----------- ------------
Property, plant and equipment - 3 1
------ ----------- ----------- ------------
Total non-current assets 73,529 62,726 66,984
------ ----------- ----------- ------------
Trade and other receivables 6 275 154 388
------ ----------- ----------- ------------
Cash and cash equivalents 2,188 3,645 1,923
------ ----------- ----------- ------------
Total current assets 2,463 3,799 2,311
------ ----------- ----------- ------------
Total assets 75,992 66,525 69,295
------ ----------- ----------- ------------
Equity
------ ----------- ----------- ------------
Share capital 7 71,926 71,829 71,829
------ ----------- ----------- ------------
Share premium 7 261,278 260,271 260,272
------ ----------- ----------- ------------
Undenominated capital 623 623 623
------ ----------- ----------- ------------
Foreign currency translation
reserve 15,534 6,564 9,616
------ ----------- ----------- ------------
Share based payment reserve 893 962 767
------ ----------- ----------- ------------
Accumulated losses (283,833) (283,561) (281,370)
------ ----------- ----------- ------------
Total equity attributable
to equity holders of the
company 66,421 56,688 61,737
------ ----------- ----------- ------------
Liabilities
------ ----------- ----------- ------------
Decommissioning provision 9 6,225 6,346 6,056
------ ----------- ----------- ------------
Total non-current liabilities 6,225 6,346 6,056
------ ----------- ----------- ------------
Warrant liability 10 2,344 2,948 460
------ ----------- ----------- ------------
Trade and other payables 8 1,002 543 1,042
------ ----------- ----------- ------------
Total current liabilities 3,346 3,491 1,502
------ ----------- ----------- ------------
Total liabilities 9,571 9,837 7,558
------ ----------- ----------- ------------
Total equity and liabilities 75,992 66,525 69,295
------ ----------- ----------- ------------
The accompanying notes are an integral part of these condensed consolidated financial statements.
BARRYROE OFFSHORE ENERGY P.l.c.
Consolidated statement of changes in Equity
For the 6 months ended 30 June 2022
Foreign Share
Currency Based
Share Undenominated Share Translation Payment Accumulated
Capital capital Premium Reserve Reserve losses Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 January
2022 71,829 623 260,272 9,616 767 (281,370) 61,737
--------- --------------- --------- ------------- --------- ------------ ---------
Loss for financial
period - - - - - (2,345) (2,345)
--------- --------------- --------- ------------- --------- ------------ ---------
Currency translation - - - 5,918 - - 5,918
--------- --------------- --------- ------------- --------- ------------ ---------
Total comprehensive
income - - - 5,918 - (2,345) 3,573
--------- --------------- --------- ------------- --------- ------------ ---------
Transactions
with owners,
recorded directly
in equity
--------- --------------- --------- ------------- --------- ------------ ---------
Shares issued
in period 97 - 1,006 - - (118) 985
--------- --------------- --------- ------------- --------- ------------ ---------
Share based
payments in
period - - - - 126 - 126
--------- --------------- --------- ------------- --------- ------------ ---------
At 30 June
2022 71,926 623 261,278 15,534 893 (283,833) 66,421
--------- --------------- --------- ------------- --------- ------------ ---------
At 1 January
2021 71,743 623 256,773 4,634 806 (285,189) 49,390
--------- --------------- --------- ------------- --------- ------------ ---------
Loss for financial
period - - - - - 1,628 1,628
--------- --------------- --------- ------------- --------- ------------ ---------
Currency translation - - - 1,930 - - 1,930
--------- --------------- --------- ------------- --------- ------------ ---------
Total comprehensive
income - - - 1,930 - 1,628 3,558
--------- --------------- --------- ------------- --------- ------------ ---------
Transactions
with owners,
recorded directly
in equity
--------- --------------- --------- ------------- --------- ------------ ---------
Shares issued
in period 86 - 3,498 - - - 3,584
--------- --------------- --------- ------------- --------- ------------ ---------
Share based
payments in
period - - - - 156 - 156
--------- --------------- --------- ------------- --------- ------------ ---------
At 30 June
2021 71,829 623 260,271 6,564 962 (283,561) 56,688
--------- --------------- --------- ------------- --------- ------------ ---------
At 1 January
2021 71,743 623 256,773 4,634 806 (285,189) 49,390
--------- --------------- --------- ------------- --------- ------------ ---------
Loss for financial
year - - - - - 3,442 3,442
--------- --------------- --------- ------------- --------- ------------ ---------
Currency translation - - - 4,982 - - 4,982
--------- --------------- --------- ------------- --------- ------------ ---------
Total comprehensive
income - - - 4,982 - 3,442 8,424
--------- --------------- --------- ------------- --------- ------------ ---------
Transactions
with owners,
recorded directly
in equity
--------- --------------- --------- ------------- --------- ------------ ---------
Share based
payment expense - - - - 338 - 338
--------- --------------- --------- ------------- --------- ------------ ---------
Share options
lapsed in year - - - - (377) 377 -
--------- --------------- --------- ------------- --------- ------------ ---------
Shares issued
in year 86 - 3,499 - - - 3,585
--------- --------------- --------- ------------- --------- ------------ ---------
Transactions
with owners,
recorded directly
in equity 86 - 3,499 - (39) 377 3,923
--------- --------------- --------- ------------- --------- ------------ ---------
At 31 December
2021 71,829 623 260,272 9,616 767 (281,370) 61,737
--------- --------------- --------- ------------- --------- ------------ ---------
BARRYROE OFFSHORE ENERGY P.l.c.
Consolidated statement of cash flows
For the 6 months ended 30 June 2022
6 months 6 months Year ended
ended 30 June ended 30 31 December
2022 June 2021 2021
Unaudited Unaudited Audited
--------------- ----------- -------------
EUR'000 EUR'000 EUR'000
--------------- ----------- -------------
Cash flows from operating activities
--------------- ----------- -------------
(Loss)/profit before income tax
for the period (2,345) 1,628 3,442
--------------- ----------- -------------
Adjustments for:
--------------- ----------- -------------
Depreciation 1 3 15
--------------- ----------- -------------
Finance income - (3,765) (6,699)
--------------- ----------- -------------
Finance expense 1,398 1,072 888
--------------- ----------- -------------
Equity settled share based payment
charge 126 156 338
--------------- ----------- -------------
Foreign exchange - (19) (16)
--------------- ----------- -------------
Change in trade and other receivables 113 69 (165)
--------------- ----------- -------------
Change in trade and other payables (40) (272) 227
--------------- ----------- -------------
Net cash outflow from operating
activities (747) (1,128) (1,970)
--------------- ----------- -------------
Cash flows from investing activities
--------------- ----------- -------------
Acquisition of exploration and
evaluation assets (517) (331) (1,492)
--------------- ----------- -------------
Cash calls in respect of exploration
and evaluation assets 25 - 262
--------------- ----------- -------------
Acquisition of property, plant
and equipment - (2) (2)
--------------- ----------- -------------
Net cash used in investing activities (492) (333) (1,232)
--------------- ----------- -------------
Cashflows from financing activities
--------------- ----------- -------------
Proceeds from issue of security
instruments (see note 7) 1,695 2,974 2,974
--------------- ----------- -------------
Security instrument Issue costs (182) - -
--------------- ----------- -------------
Net cash from financing activities 1,513 2,974 2,974
--------------- ----------- -------------
Net increase in cash and cash
equivalents 274 1,513 (228)
--------------- ----------- -------------
Cash and cash equivalents at
beginning of period 1,923 2,110 2,110
--------------- ----------- -------------
Effect of exchange rate fluctuations
on cash and cash equivalents (9) 22 41
--------------- ----------- -------------
Cash and cash equivalents at
end of period 2,188 3,645 1,923
--------------- ----------- -------------
The accompanying notes are an integral part of these condensed consolidated financial statements.
BARRYROE OFFSHORE ENERGY P.l.c.
Note 1 - Accounting Policies
General Information
BARRYROE OFFSHORE ENERGY P.l.c. (previously known as "Providence Resources P.l.c") ("the Company") is a Company incorporated and domiciled in the Republic of Ireland. The registration number of the Company is 268662 and the address of the registered office is Paramount Court, Corrig Road, Sandyford Business Park, Dublin 18, D18 R9C7. The unaudited consolidated interim financial statements of the Company for the six months ended 30 June 2022 (the "Interim Financial Statements") include the Company and its subsidiaries (together referred to as the "Group"). The Interim Financial Statements were authorised for issue by the Directors on 30 September 2022.
Basis of accounting
These interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended 31 December 2021 ('last annual financial statements'). They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.
The 30 June 2022 figures and the 30 June 2021 comparative figures do not constitute statutory financial statements of the Group within the meaning of the Companies Act, 2014. The consolidated financial statements of the Group for the year ended 31 December 2021, together with the independent auditor's report thereon, were filed with the Irish Registrar of Companies following the Company's Annual General Meeting and are also available on the Company's Website. The auditor's report on those financial statements was unqualified and contains a "material uncertainty related to going concern" paragraph.
The condensed set of financial statements included in this half-yearly financial report has been prepared on a going concern basis as the Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future (See below for further details on the Directors assessment of going concern).
In preparing these interim financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual report.
The Interim Financial Statements are presented in Euro, rounded to the nearest thousand, which is the functional currency of the Company and also the presentation currency for the Group's financial reporting.
The significant accounting policies applied in these interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ending 31
BARRYROE OFFSHORE ENERGY P.l.c.
Note 1 - Accounting Policies (continued)
December 2021. Amendments to standards and interpretations which are effective for the Group from 1 January 2022 do not have a material effect on the results or financial posting in the interim financial statements as at and for the period ending 30 June 2022.
Going concern
The Group had net assets of EUR66.4m, including cash on hand of EUR2.2m as at 30 June 2022. It recognised a loss after taxation of EUR2.3m for the six month period, after a non-cash charge of EUR1.75m in respect of warrants issued on 17 June 2022, offset by a non-cash gain of EUR0.46m on the expiry in May 2022 of warrants that had been issued in May 2020. The Directors have carefully considered the financial position of the Group and, in that context, have prepared the interim financial statements on a going concern basis.
The Group's principal interest is the development of the Barryroe oil and gas Field. The Barryroe Standard Exploration Licence period continued up until the 13 July 2021. Prior to its expiry, having met all the conditions attaching to that Licence, the Group applied for the follow-on permit, being a Lease Undertaking, which is subject to government approval. The approval process is ongoing and the Directors anticipate that the Lease Undertaking will be granted. The Directors note that the Irish Government has stated that all existing licences will be allowed to run their full life cycle.
The Directors have carefully considered the financial position of the Group and have prepared cashflow forecasts for the next 12 months , considering both current and future expenditure commitments and the options available to fund such commitments, including equity funding and other financing options in the twelve month period from the date of approval of these interim financial statements. In making their cashflow forecasts, critical underlying assumptions, include the granting of the Barryroe Lease Undertaking on terms and conditions that are acceptable and the subsequent successful completion of an appropriate fund raising to meet the costs of the proposed Barryroe work programme within the expected Lease Undertaking period.
The Directors have considered the matters set out above and determined that the critical assumptions represent a material uncertainty that may cast significant doubt upon the Group's ability to continue as a going concern. The Directors note that, if either assumption were not fulfilled, the Group may be unable to continue realising its assets and discharge its liabilities in the normal course of business.
After making enquiries and considering the uncertainties described above, the Directors have a reasonable expectation that the Group will have sufficient funds available over the next 12 months to meet all its commitments as they fall due and will have adequate resources to continue in operational existence for the foreseeable future. The Directors note that the Group has continued to have the strong support of its shareholders.
For these reasons, the Directors have adopted the going concern basis in preparing the interim financial statements which do not include any adjustments that would be necessary if this basis were subsequently adjudged to be inappropriate.
BARRYROE OFFSHORE ENERGY P.l.c.
Note 2 - Administration Expenses
6 months 6 months Year ended
ended 30 June ended 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
--------------- --------------- -------------
EUR'000 EUR'000 EUR'000
--------------- --------------- -------------
Corporate, exploration and
development expenses 947 1,084 2,385
--------------- --------------- -------------
Foreign exchange gains net - (19) (16)
--------------- --------------- -------------
Total administration expenses
for the period 947 1,065 2,369
--------------- --------------- -------------
Total charged to the income
statement 947 1,065 2,369
--------------- --------------- -------------
Note 3 - Finance Income
6 months 6 months Year ended
ended 30 June ended 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
--------------- --------------- -------------
EUR'000 EUR'000 EUR'000
--------------- --------------- -------------
Movement in fair value of
warrants (note 10) - 3,765 5,643
--------------- --------------- -------------
Redetermination of decommissioning
provision (note 9) - - 1,056
--------------- --------------- -------------
Total finance expense recognised
in income statement - 3,765 6,699
--------------- --------------- -------------
Note 4 - Finance Expense
6 months 6 months Year ended
ended 30 June ended 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
--------------- --------------- -------------
EUR'000 EUR'000 EUR'000
--------------- --------------- -------------
Unwinding of discount on
decommissioning provision
(note 8) 40 302 593
--------------- --------------- -------------
Foreign exchange on decommissioning
provision - 159 294
--------------- --------------- -------------
Interest on right to use
asset - 1 1
--------------- --------------- -------------
Issue costs associated with 65 - -
warrants
--------------- --------------- -------------
Movement in fair value of
warrants (note 10)* 1,293 610 -
--------------- --------------- -------------
Total finance expense recognised
in income statement 1,398 1,072 888
--------------- --------------- -------------
*The EUR1.293m finance expense arises on the GBP0.015 warrant instruments issued as part of the 17 June 2022 equity raise being fair valued at 30 June 2022 (expense of EUR1.753m) offset by that in respect of the GBP0.09 warrants which expired on the 6 May 2022 (gain of EUR0.460m).
BARRYROE OFFSHORE ENERGY P.l.c.
Note 5 - Exploration and evaluation assets
EUR'000
Cost and book value
--------
At 1 January 2021 60,425
--------
Additions 331
--------
Foreign exchange translation 1,967
--------
At 30 June 2021 62,723
--------
At 1 January 2021 60,425
--------
Additions 1,492
--------
Cash calls received in year (262)
--------
Decommissioning redetermination 287
--------
Foreign exchange translation 5,041
--------
At 31 December 2021 66,983
--------
At 1 January 2022 66,983
--------
Additions 517
--------
Cash calls received in period (25)
--------
Foreign exchange translation 6,054
--------
At 30 June 2022 73,529
--------
The exploration and evaluation asset balance as at 30 June 2022 relates to the Group's Barryroe interest.
The directors assessed all activities ongoing within exploration and evaluation assets and determined that no impairment charge was required at 30 June 2022 (30 June 2021 - EURnil). The directors recognise that the future realisation of the Barryroe asset is dependent on the granting of the lease undertaking which is subject to government approval, future successful appraisal activities and the subsequent economic production of hydrocarbons.
Note 6 - Trade and other receivables
30 June 2022 30 June 2021 31 December
2021
Unaudited Unaudited Audited
------------- ------------- ------------
EUR'000 EUR'000 EUR'000
------------- ------------- ------------
VAT recoverable 40 22 48
------------- ------------- ------------
Prepayments 68 98 89
------------- ------------- ------------
Amounts due from joint
operation partner 167 34 251
------------- ------------- ------------
Total 275 154 388
------------- ------------- ------------
BARRYROE OFFSHORE ENERGY P.l.c.
Note 7 - Share Capital and Share Premium
Number
---------- -------------- --------------
Authorised: '000 EUR'000
---------- -------------- --------------
At 1 January 2022
---------- -------------- --------------
Deferred shares of EUR0.011
each 9,944,066 109,385
---------- -------------- --------------
Ordinary shares of EUR0.001
each 1,800,000 1,800
---------- -------------- --------------
At 30 June 2022
---------- -------------- --------------
Deferred shares of EUR0.011
each 9,944,066 109,385
---------- -------------- --------------
Ordinary shares of EUR0.001
each 1,800,000 1,800
---------- -------------- --------------
Number Share Capital Share Premium
---------- -------------- --------------
Issued: '000 EUR'000 EUR'000
---------- -------------- --------------
Deferred shares of EUR0.011
each
---------- -------------- --------------
At 1 January 2021 6,441,373 70,854 5,691
---------- -------------- --------------
At 31 December 2021 and
30 June 2022 6,441,373 70,854 5,691
---------- -------------- --------------
Ordinary shares of EUR0.001
each
---------- -------------- --------------
At 1 January 2021 888,803 889 251,082
---------- -------------- --------------
Warrants exercised during
2021 86,062 86 3,498
---------- -------------- --------------
At 30 June 2021 and at 31
December 2021 974,865 975 254,580
---------- -------------- --------------
Shares issued in June 2022 96,999 97 1,007
---------- -------------- --------------
At 30 June 2022 1,071,864 1,072 255,587
---------- -------------- --------------
At 30 June 2022 (Total deferred
and Ordinary shares) 7,513,237 71,926 261,278
---------- -------------- --------------
On 17 June 2022, the Company issued 96,999,006 Ordinary Shares as part of placing and subscription agreements which raised gross proceeds of $1.8 million (equivalent to EUR1.7 million) from security instruments before expenses. Each of these security instruments comprised of one Ordinary Share of EUR0.001 and one GBP0.015 Warrant.
The allotment and issue of the Warrants was subject to the passing of the Warrant Resolutions by the shareholders. On 27 July 2022, the Warrant Resolutions were successfully passed at the AGM.
On issuance, a fair value of EUR1.1m was attributed to the Ordinary Shares and EUR0.6m to the Warrants, based on the effective share price at that date. In line with the Group's accounting policies these Warrants are presented as financial liabilities (note 10).
The holder of each Warrant can exercise its rights which allows that holder to convert the Warrant into one ordinary share, with a par amount of EUR0.001, by payment of the exercise price of GBP0.015. The warrants are non-transferable and have an expiry date of 26 July 2023.
BARRYROE OFFSHORE ENERGY P.l.c.
Note 8 - Trade and other payables
30 June 2022 30 June 2021 31 December
2021
Unaudited Unaudited Audited
------------- ------------- ------------
EUR'000 EUR'000 EUR'000
------------- ------------- ------------
Accruals 915 379 836
------------- ------------- ------------
Other payables 87 164 206
------------- ------------- ------------
Total 1,002 543 1,042
------------- ------------- ------------
Note 9 - Decommissioning provision
30 June 2022 30 June 2021 31 December
2021
Unaudited Unaudited Audited
------------- ------------- ------------
EUR'000 EUR'000 EUR'000
------------- ------------- ------------
At beginning of year 6,056 5,853 5,853
------------- ------------- ------------
Unwinding of discount 40 302 593
------------- ------------- ------------
Foreign exchange gain - 159 294
------------- ------------- ------------
Redetermination of decommissioning
provision - - (769)
------------- ------------- ------------
Translation adjustment 129 32 85
------------- ------------- ------------
Total 6,225 6,346 6,056
------------- ------------- ------------
The decommissioning provision is reviewed annually to ensure that it reflects the current market conditions and updated accordingly.
During 2021, the Board undertook a strategic review of Barryroe. The outcome was that an appraisal well is planned to be drilled in 2023 preparatory to a phased development, with first oil production expected by the end of 2026, subject to Ministerial approval.
The Group anticipates that a decommissioning programme for other licence areas (since relinquished) will be undertaken at the same time as the Group's Barryroe wells, subject to regulatory consent and approval. Accordingly all, decommissioning is projected to take place in 2047. The decommissioning provision covers six wells of which five of are held in the Parent Company, while one is held in Exola DAC.
The decommissioning provision has been calculated assuming industry established oilfield decommissioning techniques and technology at current prices, based on external expert reports where available and is discounted at 1.3% per annum, reflecting the associated risk profile. During 2021, the Group undertook a review of the discount rate applied to the projected costs to derive
BARRYROE OFFSHORE ENERGY P.l.c.
Note 9 - Decommissioning provision (continued)
the net present value. The Group has used the 20 year Irish Government Bond rates of 1.30% as an appropriate discount rate.
In relation to cost inflation, experience over the last decade indicates that advances in technology and operations in the decommissioning of wells, suggests that cost inflation may reasonably be expected to be offset by gains in efficiency so the net effective cost inflation rate used was zero.
There was a EUR0.769 million adjustment to the decommissioning provision at the end of 2021.
Note 10 - Warrants
On 17 June 2022, the Company raised gross proceeds of $1.8 million (equivalent to EUR1.7 million) by the issue of security instruments with each security instrument comprising one ordinary share, with a par amount of EUR0.001, one GBP0.015 warrant (expiry 26 July 2023). The fair value of the shares was calculated using the Black Scholes model with the data from the date of issue on 17 June 2022. The value ascribed to the shares issued was EUR1,104,850. This figure was then deducted from the total cash proceeds of EUR1,695,431, leaving the remaining value attributable to the warrants of EUR590,581.
The following key input assumptions were applied to the initial valuation on issuance of the shares:
GBP0.015 Shares
Number of shares issued 96,999,009
----------------
Volatility 148%
----------------
Time period 1 Year
----------------
Dividend yield 0%
----------------
Risk free interest
rate (0.01%)
----------------
Issue price GBP0.015
----------------
Closing share Price EUR0.02
----------------
Initial fair value
of each share EUR0.01139
----------------
Fair value at issue
date EUR1,104,850
----------------
On 30 June 2022, the warrants were fair valued using appropriate inputs including the closing share price on that day of EUR0.035. The period of 12 months was used for the volatility calculation for the GBP0.015 warrants which would expire on 26 July 2023. The key assumption in the calculation of the warrants is the volatility rate used in the Black Scholes model. The fair value movement of EUR1.753m, being the difference between the issue date valuation on 17 June 2022 and that on 30 June 2022, is recorded as a finance expense in the income statement.
GBP0.015 Warrants
Number of warrants 96,999,009
------------------
Volatility 148%
------------------
Time period 1 Year
------------------
Dividend yield 0%
------------------
Risk free interest rate 0.002%
------------------
Exercise price GBP0.015
------------------
Closing share price 30 June
2022 EUR0.035
------------------
Fair value as at 30 June 2022 EUR2,344,303
------------------
BARRYROE OFFSHORE ENERGY P.l.c.
Note 10 - Warrants (continued)
The large movement in the warrant valuation from the 17 June 2022 to 30 June 2022 is driven by the increase in the closing share price. The closing price on 17 June 2022 was EUR0.02 while on the 30 June 2022, it was EUR0.035.
During 2021, there were 86,061,529 GBP0.03 warrants exercised before they expired on 6 May 2021. The fair value of the GBP0.03 warrants exercised during the period to June 2021 was recognised as a finance expense of EUR0.61m in the income statement with a corresponding increase in share premium.
January February March 21 April 21 May 21
21 21
Number of warrants 287,372 1,666,666 1,000,000 65,975,822 17,131,669
---------- ---------- ---------- ----------- -----------
Volatility 135% 135% 135% 206% 208%
---------- ---------- ---------- ----------- -----------
Time period 0.30 Year 0.18 Year 0.10 Year 0.016 Year 0.003 Year
---------- ---------- ---------- ----------- -----------
Dividend yield 0% 0% 0% 0% 0%
---------- ---------- ---------- ----------- -----------
Risk free interest
rate (0.61%) (0.61%) (0.61%) (0.61%) (0.61%)
---------- ---------- ---------- ----------- -----------
Exercise price EUR0.0337 EUR0.0342 EUR0.035 EUR0.035 EUR0.035
---------- ---------- ---------- ----------- -----------
Weighted average
closing share
price EUR0.075 EUR0.075 EUR0.054 EUR0.0392 EUR0.038
---------- ---------- ---------- ----------- -----------
Fair value EUR12,685 EUR71,219 EUR23,419 EUR439,557 EUR62,804
---------- ---------- ---------- ----------- -----------
At 30 June 2021 and 31 December 2021, the GBP0.09 warrants were fair valued. No GBP0.09 warrants were exercised, and they expired on 6 May 2022. The assumptions are shown in the table below for the fair valuation as at 30 June 2021.
GBP0.09 Warrants
Number of warrants 177,973,004
-----------------
Volatility 176%
-----------------
Time period 0.83 Year
-----------------
Dividend yield 0%
-----------------
Risk free interest rate (0.61%)
-----------------
Exercise price GBP0.09
-----------------
Closing share price 30 June
2021 EUR0.043
-----------------
Fair value as at 30 June 2021 EUR2,948,469
-----------------
BARRYROE OFFSHORE ENERGY P.l.c.
Note 10 - Warrants (continued)
The table below shows the fair value movements:
Number GBP0.03 Number GBP0.09 Number GBP0.015 Total
of Warrants Warrants of Warrants Warrants of Warrants Warrants
EUR'000 EUR'000 EUR'000 EUR'000
Fair value
as at 31
December
2020 130,684,190 EUR3,158 177,973,004 EUR3,555 - - EUR6,713
------------- ----------- ------------- ----------- ------------- ---------- -----------
January
21 exercised 287,372 EUR13 - - - - EUR13
------------- ----------- ------------- ----------- ------------- ---------- -----------
February
21 exercised 1,666,666 EUR71 - - - - EUR71
------------- ----------- ------------- ----------- ------------- ---------- -----------
March 21
exercised 1,000,000 EUR23 - - - - EUR23
------------- ----------- ------------- ----------- ------------- ---------- -----------
April 21
exercised 65,975,822 EUR440 - - - - EUR440
------------- ----------- ------------- ----------- ------------- ---------- -----------
May 21 exercised 17,131,669 EUR63 - - - - EUR63
------------- ----------- ------------- ----------- ------------- ---------- -----------
Exercised
fair value
movement
recognised
in the income
statement
to 30 June
2021 (see
note 3) 86,061,529 EUR610 - - - - EUR610
------------- ----------- ------------- ----------- ------------- ---------- -----------
Fair value
as at 30
June 2021 - - 177,973,004 EUR2,948 - - EUR2,948
------------- ----------- ------------- ----------- ------------- ---------- -----------
Total fair
value movement
recognised
in the income
statement
for the
period to
30 June
2021 (see
note 4) (EUR3,158) (EUR607) (EUR3,765)
------------- ----------- ------------- ----------- ------------- ---------- -----------
Fair Value
as at 31
December
2021 - - 177,973,004 EUR460 EUR460
------------- ----------- ------------- ----------- ------------- ---------- -----------
Total fair
value gain
recognised
in the income
statement
to 31 December
2021 (EUR2,548) (EUR3,095) (EUR5,643)
------------- ----------- ------------- ----------- ------------- ---------- -----------
Initial
fair value
on 17 June
2022 - - - - 96,999,009 EUR591 EUR591
------------- ----------- ------------- ----------- ------------- ---------- -----------
Fair value
as at 30
June 2022 - - - - 96,999,009 EUR2,344 EUR2,344
------------- ----------- ------------- ----------- ------------- ---------- -----------
Total fair
value (gain)/loss
recognised
in the income
statement
to 30 June
2022 - - - (EUR460) - EUR1,753 EUR1,293
------------- ----------- ------------- ----------- ------------- ---------- -----------
BARRYROE OFFSHORE ENERGY P.l.c.
Note 11 - Earnings per share
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2022 June 2021 2021
Unaudited Unaudited Audited
----------- ----------- -------------
EUR'000 EUR'000 EUR'000
----------- ----------- -------------
(Loss)/profit attributable
to equity holders of the
company from continuing operations (2,345) 1,628 3,442
----------- ----------- -------------
The basic weighted average
number of Ordinary shares
in issue ('000)
----------- ----------- -------------
In issue at beginning of
year and end of period 974,864 888,803 888,803
----------- ----------- -------------
Adjusted for share issue
in the period 7,462 30,675 58,520
----------- ----------- -------------
Weighted average number of
ordinary shares 982,326 919,478 947,323
----------- ----------- -------------
Basic (loss)/profit per
share (cent) (0.24) 0.18 0.36
----------- ----------- -------------
Dilutive share options 39,683 39,927 39,683
----------- ----------- -------------
Dilutive warrants 96,999 177,973 177,973
----------- ----------- -------------
Weighted average number
of ordinary shares 1,119,008 1,137,378 1,164,979
----------- ----------- -------------
Diluted (loss)/profit per
share (cent) (0.21) 0.14 0.30
----------- ----------- -------------
In the current period all potentially dilutive ordinary shares outstanding are anti-dilutive, as shown above.
For prior periods, there is a difference in the basic and dilutive profit attributable to ordinary shares for the periods ended 30 June 2021 and 31 December 2021. There were 39,683,000 (2021: 39,927,000) anti-dilutive share options and 96,999,006 (2021: 177,973,004) anti-dilutive warrants in issue as at 30 June 2022.
Note 12 - Share schemes
Options are recommended at a level to attract retain and motivate participants in the competitive environment in which the Group operates, The Remuneration Committee reviews and assesses proposals to grant share options to participants.
Share option schemes were introduced in August 1997 (expired August 2007), May 2005 (expired October 2015) and June 2009 (expired in June 2019) under which share options could be offered to employees, Directors and consultants. In addition, a long-term incentive plan was introduced in 2016.
The Group now operates only the following employee share scheme ("2020 Scheme"):
2020 Scheme
In 2020, the directors adopted a share option scheme which contains certain performance criteria. No options can be issued after 10 years of the scheme. The option price is the market price immediately preceding the date of the grant. The 2020 Scheme operates as an equity-settled share
BARRYROE OFFSHORE ENERGY P.l.c.
Note 12 - Share schemes (continued)
option scheme and the options granted are subject to certain conditions. No option is exercisable more than seven years after grant date and no option is exercisable within one year of grant.
The applicable criteria for the exercise of the options are;
(i) 33% of the total number of options granted are exercisable after one year. (ii) 33% of the total number of options granted are exercisable after two years.
(iii) The remaining 33% of the total number of options granted are exercisable after a further year has elapsed.
No Share options were issued in the period to 30 June 2022.
During the period to 30 June 2021, 9,000,000 share options were granted to Directors under the 2020 Scheme.
Grant Date 21 May 2021
Number of options granted 9,000,000
------------
Volatility 150%
------------
Time period 7 Years
------------
Dividend yield 0%
------------
Risk free interest rate (0.0156%)
------------
Exercise price EUR0.038
------------
During the period to 31 December 2021, another 9,000,000 share options were granted to Directors under the 2020 Scheme.
Grant Date 18 August 2021
Number of options granted 9,000,000
---------------
Volatility 98%
---------------
Time period 7 Years
---------------
Dividend yield 0%
---------------
Risk free interest rate (0.0156%)
---------------
Exercise price EUR0.046
---------------
The total share based payments expense in the period to 30 June 2022 charged to the income statement was EUR126,000 (2021: EUR156,000).
Note 13 - Commitments
As at 30 June 2022, the Group has capital commitments of approximately EUR0.1m (30 June 2021: EUR1.5m) to contribute to its share of costs of exploration, evaluation and appraisal activities for the remaining part of the year. However, subject to the timing of the Barryroe Lease Undertaking
BARRYROE OFFSHORE ENERGY P.l.c.
Note 13 - Commitments (continued)
being granted, then the Group could have an additional commitments of EUR1.3m which comprises two years Lease Undertaking licence fees (back dated to July 2021).
Note 14 - Post Balance Sheet Events
On 4 July 2022, Alan Curran was appointed Interim Chief Executive.
On 25 August 2022, James Menton announced that he would stand down as Chairman and leave the Board within the following 90 days.
On 27 September 2022, the company changed it's name from Providence Resources Plc to Barryroe Offshore Energy Plc.
There have been no other significant events since the balance sheet date which would require disclosure in or amendment to these interim financial statements.
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END
IR SDMSUSEESEFU
(END) Dow Jones Newswires
September 30, 2022 06:00 ET (10:00 GMT)
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