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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 : 9285A
Prospex Oil and Gas PLC
17 September 2018
Prospex Oil and Gas Plc / Index: AIM / Epic: PXOG / Sector: Oil and Gas
17 September 2018
Prospex Oil and Gas Plc ('Prospex' or the 'Company')
Interim Results
Prospex Oil and Gas Plc, the AIM quoted investment company, is pleased to announce its Interim Results for the six months ended 30 June 2018.
HIGHLIGHTS
-- Rapid progress being made across three key investment assets in line with strategy to build a leading oil and gas investment company focused on high impact European opportunities with short timelines to production:
-- Set to commence imminent production at Bainet-1 well in Romania - to be achieved within just over a year of initial project acquisition and 10 months of drilling the exploration well
o Follows successful completion of development permitting and installation of a flowline to achieve access to existing Bilca production facility
-- Podere Maiar-1d well in Italy a significant gas discovery
o Peak flow rates of 148,136 scm/day (5.2mmscf/d) and 129,658 scm/day (4.6 mmscf/d) achieved respectively from two gas-bearing reservoirs
o Production concession applications submitted and targeted to commence in Q1/Q2 2020
-- Defined work programmes to de-risk up to 830 billion cubic feet of gas (Best Estimate) of gross unrisked Prospective Resources with upside in excess of 2 Tcf resources at the Tesorillo Project in Spain
o Multistrand work programme underway
o Garnered strong local and regional support through community engagement programmes
Edward Dawson, Managing Director of Prospex, said, "Prospex has built a highly strategic portfolio based on its investment criteria of acquiring undervalued, late stage projects in proven European hydrocarbon jurisdictions that can be rapidly advanced into low cost production thanks to the availability of historic data and established infrastructure. Through this development approach we are now on the verge of commencing commercial production in Romania. We look forward to delivering on this significant milestone alongside a number of other key developments in the coming months, as we focus on generating significant value for shareholders."
CHAIRMAN'S STATEMENT
The second half of 2017 saw us acquire three core projects in Romania, Italy and Spain, each of which offer significant value uplift via near-term development. 2018 has so far been extremely active as we focus on further developing the prospectivity of these assets, each of which by their nature are multi-facetted. Accordingly, as we propel the gas discoveries in Romania and Italy towards production we continue to advance additional targets, including our interest in potentially large scale resources in Southern Spain, to build long-term value. Thanks to the progress made, we are confident that the remainder of the year will be suitably active for the Company, as we endeavour to unlock meaningful value for our shareholders.
Looking at our interest in Romania; Prospex's wholly-owned subsidiary PXOG Massey Limited has a 50% non-operated interest in the EIV-1 Suceava Concession in onshore Romania, which is located in a proven hydrocarbon basin. Having acquired this interest just over a year ago in August 2017 a fast-tracked drilling programme was implemented which culminated in a commercial gas discovery at the Bainet-1 well in November 2017.
Since this time the focus has been on commercialising the discovery. I am pleased to report success on both fronts; a 2.2km long flowline has now been laid, allowing the indirect connection of Bainet-1 to the existing Bilca production facility, here there is the onwards connection to Romania's national gas grid, owned by Transgaz, but by utilising established facilities significant cost and time savings have been made. Furthermore, we have received the relevant Government approvals, providing us with the regulatory green-light to commence production. We now look forward to the final works being completed so that production can commence. Crucially, this milestone event is expected in the very near term and we look forward to keeping shareholders updated on this exciting development.
Bainet-1 provides proof of concept for our development model; namely advance high-impact assets into production within a short time-frame. Once we have this well in production the intention in Romania is to build a larger production profile. In support of this, a number of prospective targets have already been identified with a similar potential and similarly very low cost to drill. Bainet-1 was drilled and tied into production inline within its original estimated cost of EUR800,000.
Alongside rapid developments in Romania, 2018 has seen significant news flow from the Podere Gallina Permit in Italy, which contains the Selva Gas field that historically produced 83Bcf of gas between 1960 and 1984 and in which Prospex holds a 17% interest. Attention at the project is currently centred on the Podere Maiar-1d appraisal/redevelopment well, which was confirmed to have made a significant gas discovery following flow testing in January 2018. Peak flow rates of 148,136 scm/day (5.2mmscf/d) and 129,658 scm/day (4.6 mmscf/d) on a 3/8 inch choke were achieved respectively from two gas-bearing reservoirs, C1 and C2, greatly exceeding expectations.
A production concession application has since been submitted to the Italian Ministry in May 2018 to develop a high return gas field covering 80.8km(2) at Selva, with first phase production targeted to commence in Q1/Q2 2020 at a rate of up to 150,000 cubic metres (5.3 mmscf/day) a day from the C1 and C2 reservoirs. This production plan is based on installing a fully automated gas plant at a cost of EUR2.4m, with a 1km long pipeline due to be fitted to connect Podere Maiar to the nearby Italian National Grid connection, which is located just 600 metres away. We had initially expected the application to be considered for preliminary award at the Italian Ministry Hydrocarbon Commission meeting due in July 2018, however the commission did not meet at this point and are instead expected to meet later this month. Accordingly, we look forward to sharing further updates in due course.
In parallel with this work, the project operator Po Valley Energy Limited ('PVE') is preparing documentation for the requisite Environmental Impact Assessment so as to be able to commence the next stage of environmental approval following preliminary award of the production application. Furthermore, it is worthwhile noting that the production concession application covers the full Selva area, not just the area in the vicinity of the Podere Maiar well, and includes other highly prospective prospects, such as Selva East, each of which has the potential to significantly increase the size of the overall Selva Gas-Field.
The third major element is the 38,000ha Tesorillo Project in the Cadiz Province, southern Spain. This is the newest addition to our portfolio, having acquired an initial 2.5% interest in December 2017, with the option to increase this to 49.9% based on the results of current work programmes. Whilst this project is at the earliest stage of exploration, we believe the potential is substantial.
Tesorillo is located in a proven hydrocarbon region and includes two petroleum exploration permits, Tesorillo and Ruedalabola, but is considered by the Regulator as one single licence. Tesorillo hosts the Almarchal-1 discovery well, which was drilled in 1956 and has multi-Tcf potential over a thick section of possible gas pay, including some zones which flowed gas to surface on testing. Drill stem tests and log analysis also confirmed 48m of gas pay from two Miocene Aljibe Formation sandstone intervals, whilst a further 492m of potential gas pay has been interpreted from logs but unconfirmed by testing. Ruedalabola contains the 1957 Puerto de Ojen-1 well, which is located 15km to the east of Almarchal and has displayed similar gas reservoir zones to Almarchal but could not be tested for mechanical reasons.
A report undertaken by Netherland Sewell and Associates in 2015 estimated that the total project could hold gross unrisked Prospective Resources of 830 billion cubic feet of gas (Best Estimate), with upside in excess of 2 Tcf. The focus is now on proving up the resource potential of the project
As part of the Tesorillo project rejuvenation process, we have actively engaged with central, regional and local government and stakeholders at large. The project was relaunched to the Almarchal local community in July at a well-attended local meeting, which included the local municipality mayor who led the meeting and expressed his support for the project. As part of this engagement we have also built a dedicated website for the project in Spanish, which can be viewed here: http://tarbaenergia.com/.
Alongside this engagement we have launched a multi-stranded summer field programme that is ongoing. The first strand is the field study elements that are required to populate the Environmental and Social Impact Assessment ('ESIA') report that has been commissioned from a well recognised environment consultancy group from Seville. The ESIA is a critical report required for future drilling permitting. The second strand is a detailed surface structural geological mapping exercise by a leading structural geologist from Granada University. The third strand is for a passive Audio-Magnetotellurics ('AMT') survey. This will help evaluate the subsurface geology of the permit area and test for resistivity as a further indication of the presence of hydrocarbons to build upon historic results. In July 2018, contracts were awarded to two leading European AMT contractors, GeoProSys and GeoGnosia and preparatory work is nearing completion, with final permissions for land access now being sought.
These permissions have taken slightly longer than anticipated to receive as much of the land surrounding the project is farmland and unseasonable weather this year has resulted in an exceptionally late harvesting season. We are however confident that all necessary permissions will be received whilst we await the start of this survey. The survey equipment has been demonstrated to the local community and well received.
The second and third strands will increase our geological and geophysical understanding of the permit and the final results will likely be fed into an updated Competent Person's Report in due course. We are looking to permit two wells, the first of which is likely to twin the Almarchal-1 discovery. In support of this, and as part of our permitting applications, technical discussions with potential drilling and completion contractors are on-going.
We look forward to providing further updates on these ongoing work programmes in due course as we look to realise value from Tesorillo. Furthermore, it is worth reminding shareholders, Tesorillo has excellent access to infrastructure which will aid future development as the project is located 3.9 km from the European landing point of the North African Maghreb gas pipe line, providing access to high priced European gas markets.
Financial Review
During the period in 2018, the Company raised GBP1.2million via an oversubscribed placing of 200,000,000 ordinary shares at a price of 0.6 pence per New Ordinary Share. These funds have been put to use across the Company's portfolio. This included the successful flow testing of the Podere Maiar well in Italy in Q1 2018; the tie in at the Bainet gas discovery in Romania in Q2 2018; and work to further delineate the gas discovery at Tesorillo in Spain.
Outlook
Our investment model is centred on acquiring undervalued, late stage projects located in proven European hydrocarbon jurisdictions where considerable legacy data and established infrastructure is available to create value at low cost within short time-frames. With interests in significant prospective gas resources and three key assets all progressing at pace, one of which is set to commence production imminently, our model is firmly proven.
While our current objectives are undoubtedly centred on commencing production in Romania, finalising permitting applications in Italy and commencing critical survey work in Spain, all of which we expect to be in a position to provide updates on in the coming months, we continue to evaluate additional growth opportunities in line with our investment criteria. Accordingly, I expect the next few months and beyond will not be short of news flow.
To be at this exciting and historic point in our development thanks must finally go to the management team, our advisers and of course our shareholders for their continued hard work and support.
Bill Smith
Non-Executive Chairman
FINANCIAL RESULTS
Consolidated statement of comprehensive income
Hot Features
Premium
Six months Six months
ended ended Year ended
30 June 30 June 31 December
---------------- ----------------- --------------
2018 2017 2017
(unaudited) (unaudited) (audited)
GBP GBP GBP
Administrative expenses (538,680) (380,968) (2,547,518)
Other income 18,472 - -
---------------- ----------------- --------------
(520,208) (380,968) (2,547,518)
Financial assets at fair value through profit and loss (20,553) (2,468,476) (613,723)
---------------- ----------------- --------------
Loss before income taxation (540,761) (2,849,444) (3,161,241)
Income tax expense - - -
---------------- ----------------- --------------
Loss for the period and total comprehensive income
attributable to owners of the parent for
the period (540,761) (2,849,444) (3,161,241)
================ ================= ==============
Loss per share
- Basic and diluted (0.04)p (0.70)p (0.58)p
================ ================= ==============
Consolidated statement of financial position
As at 30 June 2018
30 June 30 June 31 December
-------------------------- -------------------------- --------------------------
2018 2017 2017
(unaudited) (unaudited) (audited)
GBP GBP GBP
ASSETS
NON_CURRENT ASSETS
Property, plant and
equipment 219 639 429
Investment 2,406,236 258,130 2,426,789
Loans and other financial
assets 2,107,546 1,357,642 1,062,587
4,514,001 1,616,411 3,489,805
-------------------------- -------------------------- --------------------------
CURRENT ASSETS
Trade and other receivables 37,740 42,077 149,231
Cash and cash equivalents 489,497 895,291 850,060
-------------------------- -------------------------- --------------------------
527,237 937,368 999,291
-------------------------- -------------------------- --------------------------
TOTAL ASSETS 5,041,238 2,553,779 4,489,096
========================== ========================== ==========================
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 6,035,587 5,277,779 5,835,587
Share premium account 9,756,759 7,336,844 8,862,779
Capital redemption reserve 43,333 43,333 43,333
Merger reserve 2,416,667 2,416,667 2,416,667
Retained earnings (13,275,877) (12,585,034) (12,735,116)
-------------------------- -------------------------- --------------------------
TOTAL EQUITY 4,976,469 2,489,589 4,423,250
-------------------------- -------------------------- --------------------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 64,769 64,190 65,846
-------------------------- -------------------------- --------------------------
TOTAL LIABILITIES 64,769 64,190 65,846
-------------------------- -------------------------- --------------------------
TOTAL EQUITY AND
LIABILITIES 5,041,238 2,553,779 4,489,096
========================== ========================== ==========================
Statement of changes in equity
For the six months ended 30 June 2018
Capital
Share Share Retained redemption Merger
capital premium earnings reserve reserve Total
GBP GBP GBP GBP GBP GBP
Unaudited
At 1 January
2018 5,835,587 8,862,779 (12,735,116) 43,333 2,416,667 4,423,250
Total
comprehensive
income
for the period - - (540,761) - - (540,761)
Issue of shares 200,000 1,000,000 - - - 1,200,000
Costs in
respect of
shares
issued - (106,020) - - - (106,020)
At 30 June 2018 6,035,587 9,756,759 (13,275,877) 43,333 2,416,667 4,976,469
=========================== =========================== =========================== ========================== ====================== ==================
Unaudited
At 1 January
2017 5,107,779 6,740,144 (9,754,371) 43,333 2,416,667 4,553,552
Total
comprehensive
income
for the period - - (2,849,444) - - (2,849,444)
Issue of shares 170,000 680,000 - - - 850,000
Costs in
respect of
shares
issued - (83,300) - - - (83,300)
Equity settled
share-based
payment - - 18,781 - - 18,781
At 30 June 2017 5,277,779 7,336,844 (12,585,034) 43,333 2,416,667 2,489,589
=========================== =========================== =========================== ========================== ====================== ==================
Audited
At 1 January
2017 5,107,779 6,740,144 (9,754,371) 43,333 2,416,667 4,553,552
Total
comprehensive
income
for the year - - (3,161,241) - - (3,161,241)
Issue of shares 727,808 2,372,193 - - - 3,100,001
Costs in
respect of
shares
issued - (239,416) - - - (239,416)
Equity-settled
share-based
payments - (10,142) 180,496 - - 170,354
At 31 December
2017 5,835,587 8,862,779 (12,735,116) 43,333 2,416,667 4,423,250
=========================== =========================== =========================== ========================== ====================== ==================
Cash flow statement
For the six months ended 30 June 2018
Six months ended Six months ended Year ended
30 June 30 June 31 December
-------------------- ---------------------- ----------------------
2018 2017 2017
(unaudited) (unaudited) (audited)
GBP GBP GBP
Operating activities
Loss before income taxation (540,761) (2,849,444) (3,161,241)
Depreciation of property plant and equipment 210 210 420
Loss on revaluation of investments 20,553 2,468,476 613,723
Equity-settled share-based payment - 18,781 170,354
Decrease/(increase) in trade and other
receivables 111,491 (10,311) (117,465)
Decrease in trade and other payables (1,077) (23,486) (21,830)
Bad debt provision - - 1,543,888
-------------------- ---------------------- ----------------------
Net cash used in operating activities -
continuing operations (409,584) (395,774) (972,151)
-------------------- ---------------------- ----------------------
Capital expenditure
Payments to acquire investments - (48) (500,200)
Loan (payments)/repayments (1,044,959) 58,000 (1,004,587)
-------------------- ---------------------- ----------------------
Net cash (outflow)/inflow for capital
expenditure (1,044,959) 57,952 (1,504,787)
-------------------- ---------------------- ----------------------
Financing activities
Issue of share capital 1,200,000 850,000 3,100,001
Costs in respect of share issue (106,020) (83,300) (239,416)
Net cash generated from financing activities 1,093,980 766,700 2,860,585
-------------------- ---------------------- ----------------------
Net increase in cash and cash equivalents (360,563) 428,878 383,647
Cash and cash equivalents at start of period 850,060 466,413 466,413
-------------------- ---------------------- ----------------------
Cash and cash equivalents at end of period 489,497 895,291 850,060
==================== ====================== ======================
Notes to the interim financial statements
1 General information
Prospex Oil and Gas Plc is a company incorporated in the United Kingdom, which is listed on the Alternative Investment Market of the London Stock Exchange Plc. The address of its registered office is Stonebridge House, Chelmsford Road, Hatfield Heath, Essex CM22 7BD. The Group is primarily involved in investing in oil and gas.
2 Financial information
The interim financial information for the six months ended 30 June 2018 has not been audited or reviewed and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The comparative financial information for the year ended 31 December 2017 has been derived from the audited financial statements for that period. A copy of those statutory financial statements for the year ended 31 December 2017 has been delivered to the Registrar of Companies. The report of the independent auditors on those financial statements was unqualified and did not contain a statement under Sections 498 (2) or (3) of the Companies Act 2006.
The interim financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS and under the historical cost convention. They have also been on a basis consistent with the accounting policies expected to be applied for the year ending 31 December 2018 and which are also consistent with those set out in the statutory accounts of the Company for the year ended 31 December 2017, except for the adoption of new standards and interpretations.
3 Taxation
On the basis of these accounts there is no tax charge for the period.
4 Earnings per share
The earnings and number of shares used in the calculation of earnings per share are as follows:
Six months ended Six months ended Year ended
30 June 30 June 31 December
----------------- ------------------ ------------------
2018 2017 2017
(unaudited) (unaudited) (audited)
Basic and diluted
Loss for the financial period (540,761) (2,849,444) (3,161,241)
Weighted average number of shares 1,205,858,239 407,885,284 544,580,539
Loss per share (0.04)p (0.70)p (0.58)p
================= ================== ==================
There was no dilutive effect in respect of the share options and warrants outstanding during the period.
5 Non-current investment
Shares in
group Investments
--------------------------------------------------------
undertakings Listed Unlisted Totals
GBP GBP GBP GBP
Unaudited
At 1 January
2018 2,143,247 183,542 100,000 2,426,789
Revaluations - (20,553) - (20,553)
At 30 June
2018 2,143,247 162,989 100,000 2,406,236
=========================== =========================== =========================== ====================
Unaudited
At 1 January
2017 2,308,600 131,712 100,000 2,540,312
Revaluations (2,308,600) 26,418 - (2,282,182)
At 30 June
2017 - 158,130 100,000 258,130
=========================== =========================== =========================== ====================
Audited
At 1 January
2017 2,308,600 131,712 100,000 2,540,312
Additions 500,200 - - 500,200
Revaluations (665,553) 51,830 - (613,723)
At 31
December
2017 2,143,247 183,542 100,000 2,426,789
=========================== =========================== =========================== ====================
The investments in subsidiary undertakings are accounted for at fair value through the profit and loss, as the Company is deemed to be an Investment Entity.
6 Dividends
The directors do not propose to declare a dividend for the period.
7 Copies of interim results
Copies of the interim results can be obtained from the website www.prospexoilandgas.com. From this site you may access our financial reports and presentations, recent press releases and details about the company and its operations.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
* * ENDS * *
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
Notes
Prospex Oil and Gas Plc is an AIM quoted investment company focussed on high impact onshore and shallow offshore European opportunities with short timelines to production. The Company's strategy is to acquire undervalued projects with multiple, tangible value trigger points that can be realised within 12 months of acquisition and then applying low cost re-evaluation techniques to identify and de-risk prospects.
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
IR LFFLLADIRLIT
(END) Dow Jones Newswires
September 17, 2018 02:01 ET (06:01 GMT)
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