Independent Oil & Gas PLC Interim Results (6866N)

TIDMIOG

RNS Number : 6866N

Independent Oil & Gas PLC

26 September 2019

26 September 2019

Independent Oil and Gas plc

1H 2019 Interim Results

Independent Oil and Gas plc ("IOG" or the "Company") (AIM: IOG.L), the AIM-listed development and production focused oil and gas company with key interests in the Southern North Sea ("SNS"), is pleased to present its unaudited interim results for the six months ended 30 June 2019.

Operational Highlights

   -- SNS Core Project expanded to include the 108 BCF 2C Contingent Resources at Goddard; 
 
   -- Engineering and design work for Phase 1 Southwark and Blythe platforms progressed following successful completion 
      of geotechnical surveys; and 
 
   -- Tendering processes initiated for Phase 1 platform and SURF scopes. 

Corporate and Financial Highlights

   -- Institutional equity fundraise; fully subscribed open offer and Board/management subscription, raising gross 
      aggregate proceeds of GBP18.9 million; 
 
   --  Conversion and restructuring of LOG debt; 
 
   -- Relationship Agreement signed with LOG; 
 
   -- Rejection of indicative proposal from Rockrose Energy; 
 
   -- Appointment of Esa Ikaheimonen as Senior Independent Non-Executive Director and Chair of Audit Committee; and 
 
   -- Appointment of Neil Hawkings as Independent Non-Executive Director and Chair of HSE and Technical Committee. 

Post-Period End Highlights

   -- Signing of definitive documents to farm out 50% of the Company's portfolio, excluding Harvey, to CalEnergy 
      Resources Limited ("Farm-out"); 
 
   -- Successful raise of EUR100 million 5-year bond ("Bond") which sees the Company fully funded for Phase 1 of the 
      Core Project; 
 
   -- Drilling of Harvey appraisal well; 
 
   -- Signing of SPA to acquire the Thames Reception Facilities at Bacton Gas Terminal; and 
 
   -- Area of Mutual Interest ("AMI") agreement with CalEnergy Resources Limited. 

Future Newsflow

   -- Completion of Farm-out to CalEnergy Resources Limited; 
 
   -- FID and commencement of Core Project Phase 1 project execution; 
 
   -- Full Harvey appraisal well results; and 
 
   -- CalEnergy Resources Limited option to farm in to Harvey. 

Andrew Hockey, CEO of IOG, said:

"In challenging circumstances, the IOG team has achieved a series of very significant steps to unlock the value of our portfolio during 1H19 and thereafter. Most notably we completed an institutional fund raise in April 2019 which, along with a Board and Management subscription and a fully subscribed open offer, raised gross proceeds of GBP18.9 million. Other significant highlights include the restructuring and conversion of existing debt facilities, the successful defence from a possible hostile takeover, contractor bid processes for Phase 1 platform and SURF contracts and strengthening of the board with two high-quality new non-executive directors in Esa Ikaheimonen and Neil Hawkings.

Post period end, we signed the farm-out agreement with CalEnergy Resources Limited, signed an SPA to acquire the Thames Reception Facilities at Bacton, and successfully raised a EUR100 million bond to complete the balance of required Phase 1 funding. We have also drilled the Harvey appraisal well in under two months with no HSE incidents, confirming a 49ft gas column, and are currently assessing the detailed well results to generate updated volume estimates.

I am immensely proud of everything the team has achieved to date this year. We continue to focus our efforts on ensuring that all remaining Farm-out completion conditions, which consist of routine consents and agreements with third parties, are met as soon as possible. At completion we will be fully funded for the Phase 1 development execution phase and we remain as focused as ever on delivering value for our shareholders."

Certain information communicated in this announcement was, prior to its publication, inside information for the purposes of Article 7 of Regulation 596/2014.

Enquiries:

 
 Independent Oil and Gas plc 
  Andrew Hockey (CEO)           [phone] 
  James Chance (CFO)             0510 
 finnCap Ltd 
  Christopher Raggett           [phone] 
  Anthony Adams                  0500 
 Peel Hunt LLP 
  Richard Crichton              [phone] 
  David McKeown                  8900 
 Vigo Communications 
  Patrick d'Ancona 
  Chris McMahon                 [phone] 
  Simon Woods                    0230 
 

Notes

About Independent Oil and Gas

Subject to completion of the farm-out transaction announced on 26 July 2019, IOG will own and operate a 50% stake in substantial low risk, high value gas reserves in the UK Southern North Sea. The Company's Core Project targets a net 2P peak production rate of 69 MMCF/d (c. 12kBoe/d) from net 2P gas Reserves of 151 BCF(1) + 2C gas Contingent Resources of 55 BCF(2), via an efficient hub strategy. In addition to the independently verified 2P reserves at Blythe, Elgood, Southwark, Nailsworth and Elland and 2C Contingent Resources at Goddard, IOG also has independently verified best estimate net unrisked prospective gas resources of 37 BCF(2) at Goddard and is in the process of updating its management estimate of gas resources at Harvey. Alongside this IOG continues to pursue value accretive acquisitions to generate significant shareholder returns.

(1)ERC Equipoise Competent Persons Report: October 2017, adjusted by Management to account for updated project timing and compression

(2)ERC Equipoise Goddard Competent Persons Report: October 2018

Further information can be found at www.independentoilandgas.com

The Directors present their interim report of operations and unaudited consolidated financial statements of Independent Oil and Gas plc ("the Company") and its subsidiaries ("the Group") for the six months ended 30 June 2019. All amounts are shown in Pounds Sterling, unless otherwise stated.

This interim financial report is the responsibility of and has been approved by the Directors. The Directors are responsible for preparing the Interim Report which has not been audited by the Company's auditors. In addition to the results for the first six months of 2019 ("1H 2019"), comparative information is provided for the six months ended 30 June 2018 ("1H 2018"). Comparative information for the Group's financial position is also provided the year ended 31 December 2018 ("FY 2018").

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union.

Chief Executive Review

The first half of 2019 was a very significant period for the Company as we continued to make strides towards Final Investment Decision ("FID") on our two-phase gas development project ("Core Project") in the Southern North Sea ("SNS"). The Core Project is designed to deliver shareholder value through the production of indigenous gas which will be fed to an import-reliant UK domestic market safely and at a low unit cost, generating material cash flows for the Group and its stakeholders.

At the beginning of the period, we expanded our Core Project to include the Goddard discovery adding 2C Resources of 108 BCF to the portfolio, resulting in a total of 410 BCF, comprised of 2P and 2C reserves and resources across six discovered gas fields, excluding Harvey. The integration of Goddard adds to what was already a very strong investment case without the need for a significant increase to the overall funding requirement.

Additionally, we also have the potential to further enhance the Core Project through the appraisal and potential inclusion of the Harvey field. In May 2019, we signed an agreement with Maersk Drilling UK Ltd to contract the Maersk Resilient jack-up rig to drill the high-impact appraisal well, which I am glad to report was successfully and safely drilled post-period (August/September 2019) to a total Measured Depth ("MD") of 7,537ft in the Permian Leman sandstone reservoir. Initial analysis from the wireline data demonstrated the presence of a 49 ft gas column at the top of the reservoir. The comprehensive wireline dataset acquired in the well is currently being analysed along with core data and integrated into a revised technical assessment of reservoir gas quality, volumes and deliverability, meeting the primary objectives of the well. We plan to release the final results of these analyses in due course.

In March, RockRose Energy plc ("RockRose") published an indication of its interest to make a possible cash offer for the entire share capital of the Company at a price of 20p per IOG share. This indicative offer was rejected unequivocally by IOG's Board of Directors with the view that the announcement released by RockRose contained a number of statements with which the Board did not agree. Furthermore, the offer was also deemed as opportunistic in light of IOG's relatively low share price at the time and materially undervalued the Company, its assets and the significant upside potential. The rejection of RockRose's approach was given the full support of the administrators of London Oil & Gas Ltd ("LOG"). Shortly after its possible cash offer of 20p, RockRose approached LOG's joint administrator, Smith & Williamson LLP, with an offer to acquire the entire debt due to LOG from IOG for the sum of GBP40 million in cash, which was, in turn, rejected.

In April 2019, the Company completed a successful institutional equity placing, subscription and open offer providing the Company with aggregate gross proceeds of GBP18.9 million. These proceeds contributed towards the cost of drilling the Harvey appraisal well, ongoing Core Project costs and G&A. This was an important step that was implemented at a challenging time for the Company to provide it with the financial strength needed to remain firmly on track and allow management to execute on its strategy on behalf of our long-term shareholders and new institutional investors.

Post period-end, the Company completed a Sales and Purchase Agreement ("SPA") with Perenco UK Ltd, Tullow Oil SK Limited and Spirit Energy Resources Limited for the acquisition of the Thames Reception Facilities at the Bacton Gas Terminal. This is a key step in the process of securing the necessary infrastructural framework for our Core Project as we progress towards FID.

Furthermore, I am delighted to report that, post period end, IOG secured a farm-out agreement with CalEnergy Resources Ltd ("CER"), a subsidiary of Berkshire Hathaway Energy Company, to farm out 50 per cent of its SNS assets (excluding Harvey), as well as the Thames Pipeline and associated Thames Reception Facilities, for a potential total of up to GBP165 million in the form of cash and development carries. As part of the agreement, CER also holds an option to acquire 50 per cent of the Harvey licence within three months of completion of the Harvey appraisal well, initial results of which were announced on 11 September 2019, for an additional GBP20 million. In addition to the Farm-out, IOG and CER have signed an Area of Mutual Interest agreement to allow for future co-operation in further SNS business development activities on a 50:50 basis. The comprehensive farm-out transaction signed with such a strong partner shows great confidence in our strategy and management team and demonstrates the value of our SNS gas portfolio.

Concurrent to announcing the Farm-out, we also announced our intention to issue a Euro-denominated senior secured bond to provide the full balance of IOG's Phase I funding requirements. This was swiftly followed by the successful arrangement of a EUR 100 million 5-year senior secured bond issuance with a bullet repayment structure and an interest rate, payable quarterly, of 9.5 per cent per annum over the three-month Euribor rate. The Company also holds the option to issue additional amounts up to a maximum aggregate of EUR 30 million on the same terms, subject to further investor demand. It was agreed by both IOG and CER that completion of the Farm-out would trigger Phase I FID and lead to the submission of confirmation of full funding to the Oil & Gas Authority ("OGA").

As the business progresses, we have also continued to review our board composition and welcomed the high-calibre appointments of Esa Ikaheimonen and Neil Hawkings during this half-year period. Both directors have a tremendous amount of experience and expertise in the upstream oil and gas industry and both have made an immediate positive impact on the Company. Following the conclusion of our successful fundraise in April, we also established a new Relationship Agreement with LOG which saw Martin Ruscoe and Charles Hendry step down from the Company's Board.

I would like to thank all our shareholders for their continued support as well as the Board and management team for all their hard work and commitment during a very busy period for the Company. We are very excited by IOG's potential as we move towards completion of the Farm-out and entering the execution phase on Phase I of our Core Project in the upcoming period.

Andrew Hockey

Chief Executive Officer

26 September 2019

Operational Review

UK SNS Core Project Phase 1

Engineering design works continued with Perenco UK to understand the scope requirements for the acceptance of Phase 1 gas into and through the Bacton onshore Perenco processing plant. In addition, commercial discussions continued with Perenco to define the terms of potential processing agreements. Front end engineering and design (FEED) work continued for the Southwark and Blythe production platforms and pipelines, and tenders were issued to the contractor market for these scopes. Planning for the Environmental Impact Assessments (EIAs) and the Field Development Plan (FDP) continued and both documents were submitted to BEIS and the OGA respectively in the period.

Harvey

In May 2019, we signed an agreement with Maersk Drilling UK Ltd to contract the Maersk Resilient jack-up rig to drill the high-impact appraisal well, which was subsequently drilled (August/September 2019) post period end safely and successfully (with zero lost time incidents) to a total Measured Depth ("MD") of 7,537ft in the Permian Leman sandstone reservoir. Initial analysis from the wireline data demonstrated the presence of a 49 ft gas column at the top of the reservoir. The comprehensive wireline dataset acquired in the well is currently being analysed along with core data and integrated into a revised technical assessment of reservoir gas quality, volumes and deliverability, meeting the primary objectives of the well. We plan to release the final results of these analyses in due course.

Goddard

Since award of the Goddard licence in the 30(th) Round late in 2018, work has continued on understanding the geological and reservoir properties, and development concepts for the field. This will culminate in the next period in a Conceptual Development Report to be shared with the OGA as the first assessment part of the FDP approval process.

Mark Hughes

Chief Operating Officer

26 September 2019

Financial Review

Income statement

The post-tax loss for the first six months of 2019 was GBP4.61 million, compared to GBP2.56 million for the first six months of 2018 and GBP5.64 million for full year 2018.

The current period loss includes an expense of GBP0.70 million for net administration expenses (1H 2018 - GBP0.48 million), impairment charges of GBPnil (1H 2018 - GBP0.15 million), project and pre-acquisition expenses of GBP1.36 million (1H 2018 - GBP0.29 million), a net loss on settlement of creditors of GBPnil (1H 2018 - GBP0.11 million), an exchange loss of GBP0.01 million (1H 2018 - GBP0.13 million) and finance expenses of GBP2.54 million (1H 2018 - GBP1.40 million).

The exchange loss of GBP0.01 million for the current period (1H 2018 - GBP0.13 million) reflects fluctuations in exchange rates on the valuation of non-GBP denominated creditors and provisions.

Finance expenses include GBP1.34 million (1H 2018 - GBP0.49 million) of loan and financing charges calculated on an effective interest rate basis, plus GBP1.20 million (1H 2018 - GBP0.91 million) of accrued loan and other interest, net of capitalised interest charged to development assets.

There was no impact on the income statement following the adoption of IFRS16 (see below).

Statement of financial position

Oil and gas properties held as non-current assets of GBP45.89 million at 30 June 2019 (31 December 2018 - GBP43.88 million) represents capital expenditures attributable to the Thames Pipeline infrastructure, the Group's Blythe, Elgood, Southwark, Elland and Nailsworth pre-development interests plus the appraisal assets of Harvey, Goddard and Abbeydale. Current assets include GBP0.34 million UK VAT receivable (31 December 2018 - GBP0.31 million) and GBP0.40 prepayments (31 December 2018 - GBP0.36 million). Included within prepayments are loan finance costs incurred in advance of predetermined loan and equity financing arrangements. Current liabilities include an amount of GBP7.44 million due to LOG (31 December 2018 - GBP6.93 million) representing amounts due on loan facilities within one year and GBP1.72 million owing to Oyster Petroleum Holdings Limited (31 December 2018 - GBP1.71 million) representing deferred consideration payable on approval of the Southwark FDP. Other current liabilities include trade and other creditors and accruals of GBP5.19 million (31 December 2018 - GBP9.43 million) which includes the remaining deferred payment amount owing to Transocean Drilling UK Limited in respect of the Skipper well drilled in 2016. Non-current liabilities include GBP27.54 million owing to LOG (31 December 2018 - GBP22.88 million) representing amounts due on loan facilities net of prepaid financing costs. Non-current deferred consideration provisions of GBP4.45 million (31 December 2018 - GBP4.48 million) represent discounted amounts payable on first gas in 2021 from both the Blythe and Southwark fields. The decommissioning provision of GBP5.66 million (31 December 2018 - GBP5.64 million) represents the abandonment liabilities for both the Elland suspended well and the Thames Pipeline offshore infrastructure.

IFRS16 Lease Accounting

The new IFRS 16 standard on leases came into effect on 1 January 2019. There was no impact on the Group balance sheet as at 30 June 2019 as the Group's current exposure to operating leases is minimal and non-material. This standard will continue to be reviewed by management in light of further exposure to lease liabilities.

Following adoption, right-of-use assets under operating leases would be recorded in the balance sheet as property, plant and equipment, with an appropriate DD&A charge being taken to the income statement i.e. the income statement would now exclude lease expenses.

Lease liabilities would be presented separately on the Group balance sheet as both current and non-current liabilities; they do not form part of finance debt and would not be included in net debt under the terms of the Group's financing facilities.

In addition, the Group has no exposure to finance leases, as would have previously been reported under IAS17.

Cash flow

After adjustment for non-cash items, cash used in operations for the first six months of 2019 was GBP2.12 million (1H 2018 - GBP1.88 million). Cash used in investing activities, which include the purchase and acquisition of oil and gas properties, amounted to GBP5.58 million (1H 2018 - GBP5.30 million). This was principally funded through net borrowings of GBP3.85 million (1H 2018 - GBP11.60 million) and the issue of equity instruments, net of costs, which realised net funds of GBP17.65 million (1H 2018 - GBP0.03 million). The cash balance at the end of the period was GBP14.51 million (31 December 2018 - GBP0.70 million).

Funding and liquidity

The Board has reviewed the Group's cash flow forecasts up until December 2020 having regard to its current financial position and operational objectives. The Board is satisfied that the Group will have sufficient financial resources available to meet its commitments based on the amount of available cash within the Group, funding pursuant to the Farm-out and drawdowns from the Bond. Accordingly, the Board continues to adopt the going concern basis for the preparation of this financial information.

However, at the date of these financial statements the legally binding agreements relating to the Farm-out have not yet been completed, and as such the Bond proceeds are also not yet available to the Company. Therefore, there can be no certainty that additional funds will be forthcoming which indicates the existence of material uncertainty which may cast significant doubt about the Group and Company's ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the Group and Company was unable to continue as a going concern.

Risks and uncertainties

The Group operates in the oil and gas industry, an environment subject to a range of inherent risks and uncertainties. Being at an early stage in the Group lifecycle, the prime risks to which the Group is subject to are the access to sufficient funding to continue its operations, the status and financing of its partners, changes in cost and reserves estimates for its assets, operational delays and failures, changes in forward commodity prices and the successful development of its oil and gas reserves. Further details can be found in the audited Financial Statements for the year ended 31 December 2018.

Key performance indicators

The Group's main business is the acquisition and exploitation of oil and gas acreage. Non-financial performance is tracked through the accumulation of licence interests and the successful discovery and exploitation of oil and gas reserves.

James Chance

Chief Financial Officer

26 September 2019

Consolidated statement of comprehensive income for the six months ended 30 June 2019

 
 
                                             Unaudited   Unaudited 
                                               1H 2019     1H 2018 
                                                GBP000      GBP000 
 
 
 Other administration expenses                   (703)       (479) 
 Impairment of oil and gas properties                -       (151) 
 Project, pre-acquisition and exploration 
  expenses                                     (1,356)       (288) 
 Net loss on settlement of liabilities               -       (106) 
 Foreign exchange loss                            (12)       (128) 
                                             _________   _________ 
 
 Total administration expenses                 (2,071)     (1,152) 
                                             _________   _________ 
 
 Operating loss                                (2,071)     (1,152) 
 
 Finance expenses                              (2,538)     (1,403) 
                                             _________   _________ 
 
 Loss for the period before tax                (4,609)     (2,555) 
 
 Taxation                                            -           - 
                                             _________   _________ 
 Total comprehensive loss for the period 
  attributable to equity holders of the 
  parent                                       (4,609)     (2,555) 
                                             _________   _________ 
 
 
 
                                                        (2.2) 
 Loss for the period per ordinary share - basic             p     (2.1) p 
                                                        (2.2) 
 Loss for the period per ordinary share - diluted           p     (2.1) p 
                                                     ________   _________ 
 

The loss for the period arose from continuing activities.

Consolidated statement of changes in equity for the six months ended 30 June 2019

 
                                     Share      Share   Share- based   Accumulated     Total 
                                   capital    premium        payment        losses    equity 
                                                             reserve 
 
 Group                              GBP000     GBP000         GBP000        GBP000    GBP000 
 
 At 1 January 2018                   1,203     22,337          3,099      (31,405)   (4,766) 
 Loss for the year                       -          -              -       (5,644)   (5,644) 
                                    ______    _______        _______        ______   _______ 
 Total comprehensive expense 
  attributable to owners 
  of the parent                          -          -              -       (5,644)   (5,644) 
 
 Transactions through 
  Equity 
 Issue of warrants                       -          -          4,190             -     4,190 
 Issue of share options                  -          -            378             -       378 
 Exercise of share options              66          -        (1,359)         1,359        66 
                                    ______    _______        _______        ______   _______ 
 
                                        66          -          3,209         1,359     4,634 
                                    ______    _______        _______        ______   _______ 
 
 At 31 December 2018 (Audited)       1,269     22,337          6,308      (35,690)   (5,776) 
                                    ______    _______        _______        ______   _______ 
 
 Loss for the period                     -          -              -       (4,609)   (4,609) 
                                    ______    _______       ________        ______   _______ 
 
 Total comprehensive expense 
  attributable to owners 
  of the parent                          -          -              -       (4,609)   (4,609) 
 
 Transactions through 
  Equity 
 Issue of shares                     2,097     17,179              -             -    19,276 
 Lapse of warrants                       -          -           (31)            31         - 
 Issue of share options                  -          -            280             -       280 
 Exercise of share options              15          -          (108)           108        15 
                                    ______    _______        _______        ______   _______ 
 
                                     2,112     17,179            141           139    19,571 
                                   _______    _______        _______        ______   _______ 
 
 At 30 June 2019 (Unaudited)         3,381     39,516          6,449      (40,160)     9,186 
                                    ______    _______        _______        ______   _______ 
 

Share capital

Amounts subscribed for share capital at nominal value.

Share premium

Amounts received on the issue of shares, more than the nominal value of the shares, less issue costs.

Share-based payment reserve

Amounts reflecting fair value of options and warrants issued.

Accumulated losses

Cumulative net losses recognised in the Statement of Comprehensive Income net of amounts recognised directly in equity.

Consolidated statement of financial position at 30 June 2019

 
                                                   Unaudited       Audited 
                                                               31 December 
                                                30 June 2019          2018 
                                                      GBP000        GBP000 
 Non-current assets 
 Intangible assets: exploration & evaluation           3,476         2,352 
 Intangible assets: other                                  2             3 
 Property, plant and equipment: development 
  & production                                        42,410        41,527 
 Property, plant and equipment: other                     45            41 
 
                                                      45,933        43,923 
                                               -------------  ------------ 
 
 Current assets 
 Other receivables and prepayments                       755           672 
 Cash and cash equivalents                            14,505           702 
 
                                                      15,260         1,374 
 
 
 
 Total assets                                         61,193        45,297 
 
 
 
 Current liabilities 
 Loans                                               (7,436)       (6,934) 
 Trade and other payables                            (6,915)      (11,137) 
 
                                                    (14,351)      (18,071) 
                                               -------------  ------------ 
 
 Non-current liabilities 
 Loans                                              (27,543)      (22,884) 
 Provisions                                         (10,113)      (10,118) 
 
                                                    (37,656)      (33,002) 
                                               -------------  ------------ 
 
 
 Total liabilities                                  (52,007)      (51,073) 
 
 
 NET ASSETS / (LIABILITIES)                            9,186       (5,776) 
                                               =============  ============ 
 
 Capital and reserves 
 Share capital                                         3,381         1,269 
 Share premium account                                39,516        22,337 
 Share-based payment reserve                           6,449         6,308 
 Accumulated losses                                 (40,160)      (35,690) 
                                                   _________     _________ 
 
                                                       9,186       (5,776) 
 Total equity                                      _________     _________ 
 

Consolidated cash flow statement for the six months ended 30 June 2019

 
                                                   Unaudited   Unaudited 
                                                     1H 2019     1H 2018 
                                                      GBP000      GBP000 
 Loss after tax                                      (4,609)     (2,555) 
 
 Adjustments for: 
 Depreciation and amortisation                             9           3 
 Exploration asset write off                               -         151 
 Loss on settlement of liabilities                         -         106 
 Share based payments                                    218          67 
 Movement in other receivables                          (82)       (497) 
 Movement in trade and other payables                  (194)       (610) 
 Interest received                                      (11)         (1) 
 Interest and financing fees                           2,548       1,404 
 Foreign exchange loss                                     2          53 
                                                   _________   _________ 
 Net cash used in operating activities               (2,119)     (1,879) 
 
 Cash flows from investing activities 
 Purchase of intangible assets and property, 
  plant and equipment                                (5,586)     (5,296) 
 Interest received                                        11           1 
                                                   _________   _________ 
 
 Net cash used in investing activities               (5,575)     (5,295) 
 
 Cash flows from financing activities 
 Proceeds from issue of equity instruments of 
  the Group (net of costs)                            17,652          33 
 Cash received from loans (net of costs)               3,925      11,681 
 Interest and financing fees paid                       (80)        (76) 
                                                   _________   _________ 
 
 Net cash generated from financing activities         21,497      11,638 
 
 Increase in cash and cash equivalents in the 
  period                                              13,803       4,464 
 Cash and cash equivalents at start of period            702         145 
                                                   _________   _________ 
 
 Cash and cash equivalents at end of period           14,505       4,609 
                                                   _________   _________ 
 

Notes to the financial statements for the six months ended 30 June 2019

Notes

(i) Basis of preparation

The financial information contained in this announcement does not constitute statutory financial statements within the meaning of Section 435 of the Companies Act 2006. The financial information for the six months ended 30 June 2019 is unaudited. It is prepared in accordance with the same accounting policies as used for the year ended 31 December 2018 and those which are anticipated to be relevant to the financial statements for the year ended 31 December 2019. In the opinion of the directors the financial information for this period fairly presents the financial position, results of operations and cash flows for the period in compliance with IFRS.

The comparatives for the full year ended 31 December 2018 are not the Company's full statutory accounts for that year. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified; however, did include a reference to a matter (a material uncertainty relating to going concern) on which auditors drew attention by way of emphasis without qualifying their report. Their report did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

(ii) Loss per share

The calculation of loss per share is based upon the weighted average number of ordinary shares in issue during the period of 204,866,723 (30 June 2018: 121,246,613). Diluted loss per share is calculated based upon the weighted average number of ordinary shares plus the weighted average number of ordinary shares that would be issued upon conversion of potentially dilutive share options and warrants into ordinary shares. As the result for both periods presented was a loss, the calculation of the diluted LPS was anti-dilutive and therefore the potential ordinary shares were ignored for the purposes of calculating diluted LPS. The weighted average number of ordinary shares on a diluted basis at 30 June 2019 is 388,027,521 (30 June 2018: 149,393,771).

(iii) Dividend

The Directors do not recommend payment of a dividend.

(iv) Post Balance Sheet Events

   --      Signing of SPA to acquire the Thames Reception Facilities 
   --      Drilling of Harvey Appraisal Well 

-- Signing of Farm-out of 50% of SNS Assets (excluding Harvey) with CalEnergy Resources Limited

   --      Signing of AMI Agreement with CalEnergy Resources Limited 
   --      EUR100 million Bond issue 

INFORMATION & ADVISERS

Country of incorporation of parent company

United Kingdom

Legal form

Public limited company with share capital

Directors

Fiona MacAulay

Andrew Hockey

Mark Hughes

Esa Ikaheimonen

Neil Hawkings

General Counsel and Company Secretary

Robin Storey

Registered office

60 Gracechurch Street

London EC3V 0HR

Company registered number

07434350

Auditors

BDO LLP

55 Baker Street

London W1U 7EU

Legal advisers

Fieldfisher LLP

Riverbank House

2 Swan Lane

London EC4R 3TT

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September 26, 2019 02:00 ET (06:00 GMT)