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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Prospex Oil And Gas Plc | LSE:PXOG | London | Ordinary Share | GB00BMFZVZ53 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.525 | 1.30 | 1.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMPXOG
RNS Number : 7597Q
Prospex Oil and Gas PLC
08 June 2018
Prospex Oil and Gas Plc / Index: AIM / Epic: PXOG / Sector: Oil and Gas
8 June 2018
Prospex Oil and Gas Plc ('Prospex' or the 'Company')
2017 Annual Results and Notice of AGM
Prospex Oil and Gas Plc, the AIM quoted investment company, announces its audited annual results for the year ended 31 December 2017. The Company also gives notice that its Annual General Meeting ('AGM') will be held at 10:45 on 3 July 2018 at Peterhouse Corporate Finance Ltd, 3rd Floor, New Liverpool House, 15 Eldon Street, London, EC2M 7LD. The Financial Results for the year ended 31 December 2017 ('Accounts') together with the Notice of AGM will be available to download today from the Company's website and will also be posted to shareholders on or around 11 June 2018.
Highlights:
-- Acquired material interests in three projects with over 2Tcf of gas resources in line with strategy to build a leading oil and gas investment company focused on high impact European opportunities with short timelines to production:
o 50% economic interest in the Exploration Area of the EIV-1 Suceava Concession, which is located in a producing hydrocarbon basin in North East Romania.
o 17% working interest in the Podere Gallina Exploration Permit in the Po Valley region of Italy, a proven play in a prolific hydrocarbon region - up to 40.6 Bcf of gross unrisked prospective gas resources
o Acquisition of up to a 49.9% interest in the Tesorillo Project in southern Spain, which contains a known gas discovery with potentially up to 2Tcf of gross unrisked Prospective Resources
-- Participated in the drilling of three wells, two of which resulted in commercial gas discoveries with near term production:
o Bainet-1 well in Romania encountered 9m of reservoir with 8m of net gas pay and flowed natural gas at 33,000 cubic standard metres/day in testing ("scm/day") - production due to commence in Q3 2018 subject to final permitting consent
o Podere Maiar-1d in Italy successfully tested two gas bearing reservoirs at the shut-in Selva gas-field achieving flow rates well in excess of the pre-test target of 100,000 scm/day - Production concession application submitted with first phase production target of 150,000 scm/day- due to come on stream within the next 18 months
-- Strong cash position of GBP0.85m at year end - GBP3.1m raised during the period and GBP1.2m post period end
o Focus on keeping corporate overheads low ensures as much of the Company's funds as possible are invested in core projects and project evaluation
-- Evaluating additional late stage European onshore investment opportunities that meet management's investment criteria
Edward Dawson, Managing Director of Prospex, said, "In the space of twelve months Prospex has been transformed into a multi-project oil and gas investment company with a long pipeline of gas discoveries and prospects that potentially hold in excess of 2 Tcf of gas. Thanks to drilling success in both Romania and Italy in Q4 2017, the year ahead should see Prospex transformed once again, this time into a revenue generative multi-project oil and gas investment company, once the Bainet gas discovery in Romania has been brought online in the coming months. With production in Italy expected within 18 months and a technical programme underway in Spain to de-risk a potentially huge gas discovery, 2018 should not be short of high impact news flow, as we focus on generating significant value for shareholders."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information visit www.prospexoilandgas.com or contact the following:
Hot Features
Premium
Edward Dawson Prospex Oil and Gas Plc Tel: +44 (0) 20 3766
0325
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Jack Botros
Duncan Vasey Peterhouse Corporate Finance Tel: +44 (0) 20 7469
0932
Frank Buhagiar St Brides Partners Ltd Tel: +44 (0) 20 7236
Charlotte Page 1177
Chairman's Statement
2017 may well have been just the second full year the current management team has been in place at Prospex but that has not prevented considerable progress being made during the year towards delivering on our corporate objective: to build an oil and gas investment company with a growing portfolio of late stage European projects with short timelines to value trigger events, such as drilling. Over the course of the year, Prospex acquired material interests in three core projects: Suceava in Romania, Podere Gallina in Italy and Tesorillo in Spain; we have participated in the drilling of three new wells, two of which resulted in gas discoveries in Italy and Romania; and, towards the end of the period, we embarked on a programme to de-risk up to 2Tcf of prospective gas resources at the Tesorillo Project in Spain.
We have been able to achieve so much in such a short period thanks to our focus on acquiring interests in late stage projects where considerable resources have already been invested. This not only saves the Company significant expense, it also enables us to apply, at low cost, new techniques and technologies to legacy data, thereby accelerating the process of de-risking existing targets or identifying new plays. Depending on the results, high impact drilling activity can then be fast tracked. As our two-out-of-three success rate with the drill bit shows, we are able to achieve this without compromising the quality of the technical work undertaken. Furthermore, a successful well does not begin and end with drilling. Flow testing, reserves estimates, additional drilling and first production are among major milestones that typically need to be met before the value of an oil and gas project can be fully realised. A positive well result therefore can lead to a pipeline of near term value trigger events that our shareholders can hopefully look forward to.
This is precisely where we are at with our projects in Italy and Romania. Thanks to the success we enjoyed in the second half of 2017, the year ahead should not be short of high impact activity. Already 2018 has seen confirmation that the Podere Maiar-1d appraisal/redevelopment well on the Podere Gallina Exploration Permit ('Podere Gallina') in the Po Valley region of Italy is a commercial gas discovery after the testing of two gas bearing reservoirs exceeded expectations: flow rates were well in excess of the pre-test target of 100,000 scm/day, while methane gas content of 99.1% was recorded at both levels. The permitting process is now underway to bring Podere Maiar-1d into production, and in tandem with this, work is ongoing to generate revised contingent resource and reserve estimates based on analysis of the log and well test results. This includes reservoir engineering to optimise production from the two gas levels over the field life.
Podere Maiar-1d successfully tested the shut-in Selva gas-field, which was previously operated by ENI and historically produced 80+ Bcf of gas between 1960 and 1984. Prior to drilling, the well was targeting contingent resources (2C) of 17 Bcf. In addition to Selva, other targets have been identified on the licence, offering considerable upside of up to 40.6 Bcf of prospective gas resources as detailed in a historical Competent Person's Report ('CPR'). Contingent resource and reserve estimates, first production and potential follow-up drilling all represent additional value drivers that our shareholders can potentially look forward to at Podere Gallina.
It is a similar story at the Exploration Area of the EIV-1 Suceava Concession in onshore Romania. Here first production from the Bainet gas discovery, which was successfully drilled in Q4 2017 by the Bainet-1 well, is set to commence in in the coming months. Bainet-1, which was drilled to a total depth of 600m, encountered 9m of reservoir with 8m of net gas pay consisting of a good quality Sarmatian sandstone reservoir, similar to that found in fields producing elsewhere in the concession. During testing, natural gas containing over 99% methane flowed at a rate of approximately 33,000 /day through an 8mm choke. Production from Bainet-1, which was completed as a producer and lies close to an existing gas processing plant and associated infrastructure, will represent Prospex's first internally generated revenues. It will also provide the Company with a platform with which to target additional prospects and leads on the concession area.
Our third core project, Tesorillo in Spain (a 38,000ha permit), may be less advanced in terms of monetisation, but as with our projects in Italy and Romania, it holds a gas discovery. The Almarchal-1 well, drilled in 1956, intersected a thick section of gas pay including some zones which flowed gas to surface on testing. Netherland Sewell and Associates has assigned gross un-risked Prospective Resources of 830 billion cubic feet of gas (Best Estimate) to the permit area in a CPR, with upside in excess of 2 Tcf. Clearly these are huge numbers and we are very keen to commence de-risking the permit with a technical programme in order to test these known gas bearing sandstone sequences. An Audio Magnetotellurics ('AMT') survey is due to commence in the near term to evaluate both the subsurface geometry and the presence of gas in the potential traps within the permit area. Audio Magnetotellurics ('AMT') surveys measure subsurface resistivity and can also provide indication of the presence of gas. As well as holding a historic gas discovery, Tesorillo benefits from having excellent access to nearby infrastructure, offering a fast track route to monetisation.
Financial Review
At the time of our 2016 final results we assigned a carrying value of GBP3,910,388 to the Company's investment in the Kolo licence in Poland. Following the result of the Boleslaw-1 well in January 2017, the Company took the decision to write down the carrying value of its investment in Hutton Poland to GBP1,442,011, resulting in an exploration write-off during the six months to 30 June 2017 of GBP2,308,500. In April 2018, the Company, together with its joint venture partners, decided not to extend the Kolo Licence into its second 2 year term, as a result, the Directors have written down the remaining value to zero at the 2017 year end. This has led to a further loss of GBP1,543,888 in the 6 month period to the end of 2017 bringing the total write down for the Polish investment in the year to GBP3,852,388.
In August 2017, the Company announced its entry into Romania with an investment in the Exploration Area of the EIV-1 Suceava Concession. Notwithstanding the positive well result obtained, and the near-term prospect of revenues, the Board has decided to keep the carrying value of this asset at its cost of GBP1,062,687 at the year-end conservatively awaiting for production to start.
The entry into the Po Valley has got off to a great start. Based on the drilling results of the Podere Maiar well and the better than expected flow results in January, the Board have re-valued the Italian investment, which cost GBP500,000 upward by GBP1,667,279. This represents a conservative allocation of the expected value that the Board expects to ultimately realise.
The Company's Spanish investment - the Schuepbach Energy Espania S.r.l share acquisition announced in late December - was completed in January 2018. As a result, no value has been attributed in the 2017 accounts. With the positive reinvigoration of the project, the directors expect a significant uplift in valuation over future periods as the project progresses.
In January 2018, the Company raised GBP1.2 million via an oversubscribed placing of 200,000,000 ordinary shares at a price of 0.6 pence per New Ordinary Share to fully fund the Company's 2018 basic work programmes across its portfolio. This includes the successful flow testing of the Podere Maiar well in Italy in Q1 2018; the planned commencement of production at the Bainet gas discovery in Romania in Q2 2018; and work to further delineate the gas discovery at Tesorillo in Spain, including the upcoming AMT Survey.
Outlook
Few junior oil and gas companies can lay to claim to having drilled three new wells in three different jurisdictions over a 12 month period, two of which resulted in commercial gas discoveries. Thanks to the efforts of the executive team, who came on board with the intention of applying their proven expertise and experience within the sector to build a leading oil and gas investment company, Prospex can. Furthermore, following the progress made during the year under review, Prospex has an excellent platform in place with which to expose shareholders to multiple value trigger events in the year ahead, including the anticipated commencement of the Company's first internally generated cash flows once the Bainet gas discovery comes on line in the coming months.
With over 2Tcf of gas resources, our existing portfolio of investments already has significant company-making potential. However, we continue to evaluate additional assets that match our investment criteria: low cost, undervalued, late stage projects located in proven European hydrocarbon jurisdictions where considerable legacy data is accessible and importantly where short timelines to production have been defined. I look forward to providing further updates on our progress during what promises to be an exciting period for Prospex and our shareholders, one in which we are confident that the disconnect that has opened up between our market valuation and the underlying value of our portfolio will begin to close.
Finally, I would like to take this opportunity to thank the management team, our advisers and of course our shareholders for their support of the Company during the period.
Bill Smith
Non-Executive Chairman
* *S * *
For further information visit www.prospexoilandgas.com or contact the following:
Edward Dawson Prospex Oil and Gas Plc Tel: +44 (0) 20 3766
0325
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Jack Botros
Duncan Vasey Peterhouse Corporate Finance Tel: +44 (0) 20 7469
0932
Frank Buhagiar St Brides Partners Ltd Tel: +44 (0) 20 7236
Charlotte Page 1177
Prospex Oil And Gas Plc
Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2017
2017 2016
Note GBP GBP
CONTINUING OPERATIONS
Revenue 1 - -
Administrative expenses (2,547,518) (778,093)
-------------------- ---------------------
OPERATING LOSS (2,547,518) (778,093)
Finance costs 3 (613,723) -
Finance income 3 - 2,345,557
-------------------- ---------------------
(LOSS)/PROFIT BEFORE INCOME
TAX 4 (3,161,241) 1,567,464
Income tax 5 - -
-------------------- ---------------------
TOTAL COMPREHENSIVE (LOSS)/INCOME
FOR THE YEAR (3,161,241) 1,567,464
==================== =====================
Earnings per share expressed
in pence per share
Basic 6 (0.58)p 0.96p
==================== =====================
Prospex Oil And Gas Plc
Statement of Financial Position
31 December 2017
2017 2016
Note GBP GBP
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 7 429 849
Investments 8 2,426,789 2,540,312
Loans and other financial
assets 9 1,062,587 1,601,888
------------- ------------
3,489,805 4,143,049
CURRENT ASSETS
Trade and other receivables 10 149,231 31,766
Cash and cash equivalents 11 850,060 466,413
------------- ------------
999,291 498,179
TOTAL ASSETS 4,489,096 4,641,228
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 12 5,835,587 5,107,779
Share premium 8,862,779 6,740,144
Merger reserve 2,416,667 2,416,667
Capital redemption reserve 43,333 43,333
Retained earnings (12,735,116) (9,754,371)
------------- ------------
TOTAL EQUITY 4,423,250 4,553,552
LIABILITIES
CURRENT LIABILITIES
Trade and other liabilities 13 65,846 87,676
------------- ------------
TOTAL LIABILITIES 65,846 87,676
TOTAL EQUITY AND LIABILITIES 4,489,096 4,641,228
Prospex Oil And Gas Plc
Statement of Changes in Equity
for the year ended 31 December 2017
Capital
redemption Retained
Note Share capital Share premium Merger reserve reserve earnings Total
GBP GBP GBP GBP GBP GBP
Balance at 1
January 2016 2,657,234 6,732,714 2,416,667 43,333 (11,391,424) 458,524
Changes in
equity
Loss for the
year - - - - 1,567,464 1,567,464
Issue of shares 2,450,545 70,455 - - - 2,521,000
Costs of shares
issued - (63,025) - - - (63,025)
Equity-settled
share-based
payments - - - - 69,589 69,589
Balance at 31
December
2016 5,107,779 6,740,144 2,416,667 43,333 (9,754,371) 4,553,552
---------------- ----- ---------------- ---------------- ---------------- ------------------ ------------- ----------------
Changes in
equity
Loss for the
year - - - - (3,161,241) (3,161,241)
Issue of shares 12 727,808 2,372,193 - - - 3,100,001 Costs of shares issued - (239,416) - - - (239,416) Equity-settled share-based payments - (10,142) - - 180,496 170,354 Balance at 31 December 2017 5,835,587 8,862,779 2,416,667 43,333 (12,735,116) 4,423,250 ---------------- ----- ---------------- ---------------- ---------------- ------------------ ------------- ----------------
Share capital
Represents the nominal value of the issued share capital.
Share premium account
Represents amounts received in excess of the nominal value on the issue of share capital less any costs associated with the issue of shares.
Merger reserve
Represents the difference between the nominal value of the share capital issued by the Company and the fair value of the subsidiary at the date of acquisition.
Capital redemption reserve
A reserve into which amounts are transferred following the redemption or purchase of the company's own shares.
Retained earnings
Represents accumulated comprehensive income for the year and prior periods.
Prospex Oil And Gas Plc
Statement of Cash Flows
for the year ended 31 December 2017
2017 2016
Note GBP GBP
Cash flows from operating
activities
Cash generated from operations 1 (972,151) (577,235)
--------------- ------------------
Net cash from operating
activities (972,151) (577,235)
Cash flows from investing
activities
Purchase of fixed asset
investments (1,504,787) (1,796,543)
--------------- ------------------
Net cash from investing
activities (1,504,787) (1,796,543)
Cash flows from financing
activities
Share issue 3,100,001 2,521,000
Cost of shares issued (239,416) (63,025)
--------------- ------------------
Net cash from financing
activities 2,860,585 2,457,975
Increase in cash and cash
equivalents 2 383,647 84,197
Cash and cash equivalents
at beginning of year 2 466,413 382,216
--------------- ------------------
Cash and cash equivalents
at end of year 850,060 466,413
Prospex Oil And Gas Plc
Notes to the Statement of Cash Flows
for the year ended 31 December 2017
1. RECONCILIATION OF (LOSS)/PROFIT BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
2017 2016
GBP GBP
(Loss)/profit before income tax (3,161,241) 1,567,464
Depreciation charges 420 425
Loss/(gain) on revaluation
of investment 613,723 (2,345,557)
Equity-settled share based payments 170,354 69,589
Bad debt provision 1,543,888 -
------------------ --------------------
(832,856) (708,079)
(Increase)/decrease in trade
and other receivables (117,465) 124,143
(Decrease)/increase in trade
and other payables (21,830) 6,701
------------------ --------------------
Cash generated from operations (972,151) (577,235)
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:
31/12/2017 01/01/2017
Year ended 31 December
2017 GBP GBP
Cash and cash equivalents 850,060 466,413
31/12/2016 01/01/2016
GBP GBP
Year ended 31 December
2017
Cash and cash equivalents 466,413 382,216
Prospex Oil And Gas Plc
Notes to the Financial Statements - continued
for the year ended 31 December 2017
1. SEGMENTAL REPORTING
The Company is an Investing Company. The results for this continuing operation, all of which were carried out in the UK, are disclosed in the Income Statement. The net assets as at 31 December 2017 as shown on the Statement of Financial Position all relate to the Investment activity.
2. EMPLOYEES AND DIRECTORS
2017 2016
GBP GBP
Wages and salaries 283,879 192,665
Social security costs 30,088 19,015
Other pension costs 13,500 9,000
----------- ------------
327,467 220,680
The average number of employees during the year was as follows:
2017 2016
Directors 4 5
3. NET FINANCE COSTS
2017 2016
GBP GBP
Finance income
(Loss)/gain on revaluation
of investments (613,723) 2,345,557
4. (LOSS)/PROFIT BEFORE INCOME TAX
The loss before income tax (2016 - profit before income tax) is stated after charging/(crediting):
2017 2016
GBP GBP
Other operating leases 31,927 16,815
Depreciation - owned assets 420 425
Auditors' remuneration 16,250 16,250
Foreign exchange difference (10,752) 4,584
Bad debt provision against
amounts due from subsidiaries 1,543,888 -
5. INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose for the year ended 31 December 2017 nor for the year ended 31 December 2016.
Factors affecting the tax expense
The tax assessed for the year is higher (2016 - lower) than the standard rate of corporation tax in the UK. The difference is explained below:
2017 2016
GBP GBP
(Loss)/profit before income
tax (3,161,241) 1,567,464
Loss)/profit multiplied
by the standard rate of
corporation tax in the
UK of 19.250% (2016 - 20%) (608,539) 313,493
Effects of:
Non-deductible expenses 330,280 15,768
Depreciation add back 81 85
Tax losses not utilised 164,720 139,765
Unrealised chargeable gains 113,458 (469,111)
Tax expense - -
There is no provision for UK Corporation Tax due to adjusted losses for tax purposes, subject to agreement with HM Revenue and Customs. The deferred asset of approximately GBP686,000 (2016: GBP578,000) arising from the accumulated tax losses of approximately GBP4.0m (2016: GBP3.4m) carried forward has not been recognised but may become recoverable against future trading profits.
6. EARNINGS PER SHARE
The (loss)/earnings and number of shares used in the calculation of earnings per ordinary share are set out below:
2017 2016
GBP GBP
Basic
(Loss)/profit for the financial
period (3,161,241) 1,567,464
Weighted average of ordinary
shares 544,580,539 163,085,489
There was no dilutive effect from the options and warrants outstanding during the period.
7. PROPERTY, PLANT AND EQUIPMENT
Computer
equipment
GBP
COST
At 1 January 2017 and 31
December 2017 1,699
DEPRECIATION
At 1 January 2017 850
Charge for the year 420
At 31 December 2017 1,270
NET BOOK VALUE
At 31 December 2017 429
At 31 December 2016 849
8. INVESTMENTS
Investments
---------------------------------
Shares in group undertakings Listed Unlisted Total
GBP GBP GBP GBP
COST OR VALUATION
At 1 January 2017 2,308,600 131,712 100,000 2,540,312 Additions 500,200 - - 500,200 Revaluation (665,553) 51,830 - (613,723) At 31 December 2017 2,143,247 183,542 100,000 2,426,789 NET BOOK VALUE At 31 December 2017 2,143,247 183,542 100,000 2,426,789 At 31 December 2016 2,308,600 131,712 100,000 2,540,312
The company's investments at the Statement of Financial Position date in the share capital of companies include the following:
PXOG County Limited
Registered office: England & Wales
Nature of business: Investment entity
%
Class of shares: holding
Ordinary 100.00
2017 2016
GBP GBP
Aggregate capital and reserves (13) 3,910,475
(Loss)/profit for the year (3,852,501) 2,308,500
PXOG Massey Limited
Registered office: England & Wales
Nature of business: Investment entity
%
Class of shares: holding
Ordinary 100.00
2017
GBP
Aggregate capital and reserves (48,323)
Loss for the year (48,423)
PXOG Marshall Limited
Registered office: England & Wales
Nature of business: Investment entity
%
Class of shares: holding
Ordinary 100.00
2017
GBP
Aggregate capital and reserves 2,142,947
Profit for the year 1,642,947
PXOG Muirhill Limited
Registered office: England & Wales
Nature of business: Investment company
%
Class of shares: holding
Ordinary 100.00
2017
GBP
Aggregate capital and reserves 100
Profit for the year Nil
Investments are recognised and de-recognised on the date when their purchase or sale is subject to a relevant contract and the associated risks and rewards have been transferred. The Company manages its investments with a view to profiting from the receipt of investment income and capital appreciation from changes in the fair value of investments.
All investments are initially recognised at the fair value of the consideration given and are subsequently measured at fair value through profit and loss.
Unquoted investments, including both equity and loans are designated at fair value through profit and loss and are subsequently carried in the statement of financial position at fair value. Fair value is determined in line with the fair value guidelines under IFRS.
In accordance with IFRS 10, the proportion of the investment portfolio held by the Company's unconsolidated subsidiaries is presented as part of the fair value of investment entity subsidiaries, along with the fair value of their other assets and liabilities.
The holding period of the Company's investment portfolio is on average greater than one year. For this reason the portfolio is classified as non-current. It is not possible to identify with certainty investments that will be sold within one year.
Investments in investment entity subsidiaries are accounted for as financial instruments at fair value through profit and loss and are not consolidated in accordance with IFRS10.
These entities hold the Company's interests in investments in portfolio companies. The fair value can increase or reduce from either cash flows to/from the investment entities or valuation movements in line with the Company's valuation policy.
The fair value of these entities is their net asset values.
The Directors determine that in the ordinary course of business, the net asset values of an investment entity subsidiary are considered to be the most appropriate to determine fair value. At each reporting period, they consider whether any additional fair value adjustments need to be made to the net asset values of the investment entity subsidiaries. These adjustments may be required to reflect market participants' considerations about fair value that may include, but are not limited to, liquidity and the portfolio effect of holding multiple investments within the investment entity subsidiary.
9. LOANS AND OTHER FINANCIAL ASSETS
Loans to
group undertakings
GBP
At 1 January 2017 1,601,888
New in year 1,062,587
Repayment in year (58,000)
Other movement (1,543,888)
At 31 December 2017 1,062,587
10. TRADE AND OTHER RECEIVABLES
2017 2016
GBP GBP
Current
Amounts owed by group undertakings 113,364 -
Rent deposit 2,026 2,026
VAT 28,408 19,458
Prepayments and accrued
income 5,433 10,282
149,231 31,766
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
11. CASH AND CASH EQUIVALENTS
2017 2016
GBP GBP
Cash and cash equivalents 850,060 466,413
The Directors consider that the carrying amount of cash and cash equivalents approximates to their fair value. All of the Company's cash and cash equivalents are at floating rates of interest.
12. CALLED UP SHARE CAPITAL
2017 2016 2017 2016
Number Number GBP GBP
Allotted, issued
and fully paid
Ordinary shares of
0.1p each 1,013,593,136 - 1,013,593 -
Ordinary shares of
1p each - 285,785,836 - 2,857,858
Deferred shares of
0.1p each 942,462,000 942,462,000 942,462 942,462
Deferred shares of
GBP24 each 54,477 54,477 1,307,459 1,307,459
Deferred shares of
0.9p each 285,785,836 - 2,572,073 -
5,835,587 5,107,779
In February 2017, the Company undertook a Share Capital Reorganisation whereby each Existing Ordinary Share of GBP0.01 was subdivided into one New Ordinary Share of GBP0.001 and one New Deferred Share of GBP0.009.
In February 2017, the Company raised GBP850,000, before expenses, via a placing of 170 million new ordinary shares of GBP0.001 each (as reorganised by the share capital reorganisation) ("New Ordinary Shares") at a price of 0.5 pence per New Ordinary Share. The net proceeds of the Placing went towards the Company's ongoing evaluation of a number of potential projects, in line with its strategy to build a portfolio of investments in the European oil and gas sector, and be used for general working capital purposes.
In September 2017, the Company raised GBP650,000, before expenses, via a placing of 185,714,300 ordinary shares of GBP0.001 each at a price of 0.35 pence per New Ordinary Share. The net proceeds of the Placing would help fund the Company's share of the 2017 work programme at the Suceava Concession ('Suceava') in North East Romania. In addition, the funds would go towards the ongoing evaluation of a number of potential projects, in line with the Company's strategy to build a portfolio of investments in the European oil and gas sector, as well as for general working capital purposes.
In November 2017, the Company raised GBP1.6million, before expenses, via a placing of 372,093,000 ordinary shares of GBP0.001 each at a price of 0.43 pence per New Ordinary Share). The net proceeds of the Placing were to be used to satisfy the Consideration to acquire a 17% working interest in the Podere Gallina Exploration Permit in the Po Valley region of Italy for a total consideration payable of approximately EUR1.15 million and for general working capital purposes.
13. TRADE AND OTHER PAYABLES
2017 2016
GBP GBP
Current
Trade payables 28,681 53,123
Social security and other
taxes 11,362 9,138
Accruals and deferred income 25,803 25,415
65,846 87,676
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
14. FINANCIAL INSTRUMENTS
The principal financial instruments used by the Company, from which financial instrument risk arises are as follows:
- Trade and other receivables
- Cash and cash equivalents
- Trade and other payables
A summary of the financial instruments held by category is provided below:
2017 2016
Financial assets GBP GBP
Loans and receivables:
Trade and other receivables 5,433 31,766
Cash and cash equivalents 850,060 466,413
855,493 498,179
Financial liabilities
Trade and other payables 90,178 87,676
Financial risk management
The Company's activities expose it to a variety of risks including market risk (foreign currency risk and interest rate risk), credit risk and liquidity risk. The Company manages these risks through an effective risk management programme and through this programme, the Board seeks to minimise potential adverse effects on the Company's financial performance.
The Board provides written objectives, policies and procedures with regards to managing currency and interest risk exposures, liquidity and credit risk including guidance on the use of certain derivative and non derivative financial instruments
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its receivables and its cash deposits. It is Company policy to assess the credit risk of new customers before entering contracts. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
Liquidity risk and interest rate risk
Liquidity risk arises from the Company's management of working capital. It is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due. The Board regularly receives cash flow projections for a minimum period of 12 months, together with information regarding cash balances monthly.
The Company is principally funded by equity and invests in short-term deposits, having access to these funds at short notice. The Company's policy throughout the period has been to minimise interest rate risk by placing funds in risk free cash deposits but also to maximise the return on funds placed on deposit.
All cash deposits attract a floating rate of interest. The benchmark rate for determining interest receivable and floating rate assets is linked to the UK base rate.
Foreign currency exposure
The Company has no exposure to foreign currency risk.
15. RELATED PARTY DISCLOSURES
Included in loans to group undertakings is an amount of GBP1,543,888 (2016: GBP1,601,888) due from PXOG County Limited, the company's wholly owned subsidiary. At the year end, a provision of GBP1,543,888 (2016: GBPnil) was made against this balance.
Included in loans to group undertakings is an amount of GBP1,062,587 (2016: GBPnil) due from PXOG Massey Limited, the company's wholly owned subsidiary.
Included in trade and other receivables is an amount of GBP113,350 (2016: GBPnil) due from PXOG Marshall Limited, the company's wholly owned subsidiary.
During the year, there were consultancy fees of GBP18,000 (2016: GBP15,200) charged by Sallork Legal and Commercial Consulting Limited ("Sallork") and included in trade payables at the year-end is GBP6,674 (2016: GBPnil) owing to Sallork. Richard Mays is a director and shareholder of Sallork.
Included in trade and other payables are the following balances due to Directors as at 31 December 2017.
2017 2016
GBP GBP
Edward Dawson - 13,660
16. EVENTS AFTER THE REPORTING PERIOD
Placing
In January 2018, the Company, raised GBP1,200,000, before expenses, via a placing of 200,000,000 ordinary shares of GBP0.001 each (the "New Ordinary Shares") at a price of 0.6 pence per New Ordinary Share.
The net proceeds of the Placing should ensure Prospex is fully funded for its basic 2018 work programmes across its portfolio of investments in late stage European onshore oil and gas projects.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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(END) Dow Jones Newswires
June 08, 2018 02:55 ET (06:55 GMT)
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