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SRON Saffron Eng

4.10
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Saffron Eng LSE:SRON London Ordinary Share GB00BDCFP425 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% 4.10 4.00 4.20 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Saffron Energy PLC Interim Financial Statements (6290Q)

13/09/2017 10:36am

UK Regulatory


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TIDMSRON

RNS Number : 6290Q

Saffron Energy PLC

13 September 2017

13 September 2017

Saffron Energy Plc

("Saffron" or the "Company")

Interim Financial Statements

Saffron Energy plc (AIM: SRON), the natural gas producer with interests in northern Italy, is pleased to announce its Interim Financial Statements for the six months ended 30 June 2017.

A copy of these is also available on the Company's website https://saffronenergy.co.uk/investors/financial-reports/

About Saffron Energy PLC

Saffron Energy is a natural gas producer with interests in Northern Italy. Its portfolio includes two gas production fields (Sillaro and Bezzecca (90%)), and an application for a near-term gas production field (Sant'Alberto), all near Milan and Bologna. Saffron Energy commenced trading on the London AIM Market under the ticker of SRON on 24 February 2017.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For more information, please visit www.saffronenergy.co.uk or contact the following:

 
 Saffron Energy plc                  +44 (0) 7791288381 
 Michael Masterman, CEO              info@saffronenergy.co.uk 
 
 Grant Thornton UK LLP (Financial    +44 (0) 207 383 
  & Nominated Adviser)                5100 
 Colin Aaronson 
 Harrison J Clarke 
 
 Turner Pope Investments (TPI) 
  Ltd (Broker)                       +44 (0)2036214120 
 Ben Turner                          info@turnerpope.com 
 James Pope 
 
 Cassiopeia Services (PR/IR)         +44 (0) 7949690338 
 Stefania Barbaglio                  Stefania@cassiopeia-ltd.com 
 

CHIEF EXECUTIVE OFFICER'S STATEMENT

Total Production for the first six months of 2017 amounted to 2.6 million standard cubic metres of gas (circa 91 million standard cubic feet). Production in 2016 for the same period was 2.4 million standard cubic metres (circa 83 million standard cubic feet).

Production for the period was from the Company's Sillaro and Bezzecca gas fields. Sillaro which is currently producing from a single level - CO - was expected to stop production early in the year, however despite a slight decrease in the daily rate, production from this level continues strong averaging between 5,000 to 10,000 scm/day. As announced to the market in March, the development and tie in of the Bezzecca gas field was completed and commissioned in Q2 on time and on budget with first gas flows on 18 April and full commercial production commencing at a steady rate from the Level A interval in mid-May 2017. Over the first two weeks of July, the Company installed a downhole choke at Bezzecca and production from the field recommenced immediately afterwards from level, A and S. Production rates in Level A were adjusted in order to allow for increased aggregate production from both levels.

The Company continues to make good progress in its application for a full production concession for the gas field Sant'Alberto. The Company is currently awaiting the granting of an Intesa (agreement) from the Emilia Romagna regional government, following which the Ministry of Economic Development in Rome will issue the production concession. The Company had originally anticipated that the Intesa and the production concession would have been granted by the end of the first half of 2017. Saffron now anticipates that this will have been achieved by Q3 2017. Development of Sant'Alberto will follow the grant of the production concession and first gas is now expected in or around Q1 2018.

Finance

In February, the Company successfully listed on the AIM board of the London Stock Exchange following an oversubscribed GBP2.5m book build and capital raising.

The net loss of the Company after income tax amounted to EUR916k for the half-year ended 30 June 2017. The operating results for the first six months of the year reflect the fact that commercial production from Bezzecca was only captured in the last two months of the period and include some additional one-off IPO related costs. Consequently the half year results presented in this report are not indicative of the ongoing earnings potential of the Company.

Health and Safety

The Company places a high importance on its commitment to Health, Safety and the Environment (HS&E). Saffron ensures that the various stages of business activities from initial planning to carrying-out daily operational procedures are designed and performed with the implemented HS&E safety systems in mind. A total of 16,058 man- hours worked both on-site and within the administrative office with no incidents or near misses to report is testament to the importance and effectiveness the internal HS&E management systems. Saffron is committed to maintaining environmental sustainability and health and safety in the workplace as they are an integral part of our business strategy and corporate citizenship.

Outlook

During the period, Saffron has reached major milestones with mechanical completion of the tie-in development and commencement of commercial production from Bezzecca, whilst progressing the final stages of approval for its Sant'Alberto field which is intended to come on stream in the next 12 months. On behalf of the Board, I would like to thank our hardworking team in Italy and our valued shareholders for their support during the listing process. We look forward to prospering with the development work as we head towards production from Sant'Alberto in 2018 and prepare for the second phase of production ramp-up which will include a sidetrack well at Sillaro and a second development well at Bezzecca.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2017

 
                                                        31 December 
                                         30 June 2017       2016 
                                  NOTE      EUR'000       EUR'000 
 
  Non-Current Assets 
   Inventory                                      733             - 
   Other assets                                   138             - 
   Deferred tax assets             3            1,995             - 
   Property, plant & equipment      5           2,294             - 
   Resource property costs          6           6,077             - 
                                        -------------  ------------ 
 Total non-current assets                      11,237             - 
                                        -------------  ------------ 
  Current Assets Cash 
   and cash equivalents                           522            60 
   Trade and other receivables                    698             - 
                                        -------------  ------------ 
 Total current assets                           1,220            60 
                                        -------------  ------------ 
          Total assets                         12,457            60 
                                        =============  ============ 
 
 Liability and equity 
 Current Liabilities 
  Trade and other payables                      1,836             - 
  Provisions                       7               52             - 
  Interest bearing loans            8             393             - 
                                        -------------  ------------ 
 Total current liabilities                      2,281             - 
                                        -------------  ------------ 
 
 Non-Current Liabilities 
 Provisions                        7            4,992             - 
 Total non-current liabilities                  4,992             - 
                                        -------------  ------------ 
 Total Liabilities                              7,273             - 
                                        -------------  ------------ 
 
  Equity Issued capital 
   Nominal share capital                          181            60 
   Share premium                   9            2,455             - 
   Merger reserve                   9           3,464             - 
   Accumulated losses               9           (916)             - 
                                        -------------  ------------ 
 Total equity                                   5,184            60 
                                        -------------  ------------ 
 Total equity and liabilities                  12,457            60 
                                        -------------  ------------ 
 
 

CONSOLIDATED INCOME STATEMENT AND OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHSED 30 JUNE 2017

 
                                  NOTE   30 June 
                                           2017 
                                          EUR'000 
 Revenue(**)                                  560 
 Operating costs                            (307) 
 Depreciation and amortisation 
  expense                                   (132) 
                                        --------- 
 Gross profit                                 121 
 
   Other income                                 7 
 
  Technical & administrative 
   employee benefits(*)                     (442) 
   Depreciation expense                       (4) 
   Corporate overheads 
    (inc. IPO costs) (*)                    (582) 
   Exploration costs expensed                 (4) 
                                        --------- 
 Loss from operating 
  activities                                (904) 
 
   Finance income                               - 
   Finance expense                           (12) 
                                        --------- 
 Net finance expense                         (12) 
                                        --------- 
 
   Loss before income tax 
   expense                                  (916) 
 
   Income tax expense              2            - 
                                        --------- 
 
   Loss for the period                      (916) 
 
 Other comprehensive 
  income                                        - 
 Total comprehensive 
  loss for the period                       (916) 
                                        ========= 
 
 Loss attributable to: 
 Owners of the Company                      (916) 
 Non-controlling interests                      - 
                                        --------- 
 Loss for the period                        (916) 
                                        ========= 
 
 Total comprehensive 
  loss attributable to: 
 Owners of the Company                      (916) 
 Non-controlling interests                      - 
                                        --------- 
 Total comprehensive 
  loss for the period                       (916) 
                                        ========= 
 
 Basic and diluted loss 
  per share (EUR)                  4     (0.0068) 
 

*Both these line items include one off costs associated with the restructuring and lead up to the IPO on 24 February 2017.

**The Bezzecca gas field started steady production in May 2017 and so revenue from this new production field is only for just over 2 months.

No comparative information has been included in the consolidated income statement and other comprehensive income as trading commenced in 2017.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHSED 30 JUNE 2017

 
            Attributable to equity holders of the 
                           Company 
    Share      Share      Merger    Accumulated 
    capital    Premium    Reserve      Losses      Total 
    EUR'000    EUR'000    EUR'000     EUR'000      EUR'000 
 
 
 Balance at incorporation                  -       -         -       -         - 
 Contributions by owners                  60       -         -       -        60 
                                        ----  ------  --------  ------  -------- 
 Balance at 31 December 2016              60       -         -       -        60 
                                        ====  ======  ========  ======  ======== 
 
 
   Balance at 1 January 2017              60       -         -       -        60 
 Total comprehensive loss for 
  the period: 
 Loss for the period                       -       -         -   (916)     (916) 
 Other comprehensive income                -       -         -       -         - 
                                        ----  ------  --------  ------  -------- 
 Total comprehensive loss for 
  the period                               -       -         -   (916)     (916) 
                                        ----  ------  --------  ------  -------- 
 Transactions with owners recorded 
  directly in equity: 
 Contributions by owners                  59   2,884         -       -     2,943 
 Share based payments for services 
  rendered (non-cash)                      4     210         -       -       214 
 Share based payments for acquisition 
  of subsidiary (non-cash)                58       -     9,942       -    10,000 
 Goodwill written off                      -       -   (6,478)       -   (6,478) 
 Transaction costs relating to 
  issue of shares                          -   (639)         -       -     (639) 
                                        ----  ------  --------  ------  -------- 
 Balance at 30 June 2017                 181   2,455     3,464   (916)     5,184 
                                        ====  ======  ========  ======  ======== 
 

.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHSED 30 JUNE 2017

 
                                   30 June    31 December 
                                     2017         2016 
                                    EUR'000     EUR'000 
 
 Cash flows from operating 
  activities 
 Receipts from customers                441             - 
 Payments to suppliers and 
  employees                         (1,634)             - 
 Interest paid                         (12)             - 
 Income tax paid 
                                  ---------  ------------ 
 
 Net cash used in operating 
  activities                        (1,205)             - 
                                  ---------  ------------ 
 
 Cash flows from investing 
  activities 
 Acquisition of cash balances           107             - 
 Receipts for resource property 
  costs from joint operations 
  partners                              100             - 
 Payments for resource property 
  costs and production plant 
  and equipment                       (313)             - 
                                  ---------  ------------ 
 
 Net cash used in investing 
  activities                          (106)             - 
                                  ---------  ------------ 
 
 Cash flows from financing 
  activities 
 Proceeds from issues of shares       2,944            60 
 Transaction costs relating 
  to issue of shares                  (582)             - 
 Proceeds from borrowings               678             - 
 Repayment of borrowings            (1,267)             - 
 Payment of borrowing costs 
  other than interest                     - 
                                  ---------  ------------ 
 
 Net cash provided by financing 
  activities                          1,773            60 
                                  ---------  ------------ 
 
 Net increase in cash and cash 
  equivalents                           462            60 
                                  ---------  ------------ 
 
 Cash and cash equivalents 
  brought forward                        60             - 
                                  ---------  ------------ 
 
 Cash and cash equivalents 
  carried forward                       522            60 
                                  =========  ============ 
 

NOTES TO THE INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHSED 30 JUNE 2017

NOTE 2: INCOME TAX EXPENSE

Numerical reconciliation between aggregate tax expense recognised in the statement of comprehensive income and tax expenses calculated per the statutory income tax rate

 
                                                    30 June 2017 
                                                       EUR'000 
 Loss for the year before tax                              (916) 
 Income tax benefit using the Group tax 
  rate of 24%                                              (220) 
 Current year losses and temporary differences 
  for which no deferred tax asset was recognised             220 
 Changes in temporary differences                              - 
 Other non-deductible expenses 
                                                   ------------- 
 Income tax expense / (benefit)                                - 
                                                   ============= 
 

Tax benefits have not been recognised in respect of tax losses and temporary differences for the first six months based on management's conservative assessment of future taxable profit that would be available against which the Group can utilise the benefits therefrom.

NOTE 3: DEFERRED TAX ASSETS

 
 Deferred tax assets have been recognised in respect 
  of tax losses and temporary differences based on 
  management assessment that future taxable profit 
  will be available against which the Group can utilise 
  the benefits therefrom. Deferred tax assets amounting 
  to EUR1,994,913 have been recognised in relation 
  to the Italian subsidiary's available tax losses 
  and temporary differences. 
 

NOTE 4: LOSS PER SHARE

 
                                                     30 June 
                                                        2017 
 
 Basic loss per share (EUR)                         (0.0068) 
 Diluted loss per share (EUR)                       (0.0068) 
 
   The calculation of basic loss per share was based 
   on the loss attributable to shareholders of EUR916,039 
   and a weighted average number of ordinary shares 
   outstanding during the half year of 134,165,967. 
 

NOTE 5: PROPERTY, PLANT & EQUIPMENT

 
 
                                      30 June    31 December 
                                        2017         2016 
                                      EUR'000      EUR'000 
 Office Furniture & Equipment: 
  At cost                                  200             - 
  Accumulated depreciation               (193)             - 
                                     ---------  ------------ 
                                             7             - 
                                     ---------  ------------ 
 
 Gas producing plant and equipment 
  At cost                                8,524 
  Accumulated depreciation             (6,237)             - 
                                     ---------  ------------ 
                                         2,287             - 
                                     ---------  ------------ 
                                         2,294             - 
                                     =========  ============ 
 

NOTES TO THE INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHSED 30 JUNE 2017

NOTE 5: PROPERTY, PLANT & EQUIPMENT (Continued)

 
                                      30 June    31 December 
                                        2017         2016 
                                       EUR'000     EUR'000 
 Reconciliations: 
  Reconciliation of the carrying 
   amounts for each class of 
  Plant & equipment are set out 
   below: 
  Office Furniture & Equipment: 
  Carrying amount at beginning 
   of period                                 - 
  Acquisition of assets                     11 
  Depreciation expense                     (4)             - 
                                     ---------  ------------ 
 Carrying amount at end of period            7             - 
                                     ---------  ------------ 
 
 Gas Producing plant and equipment: 
  Carrying amount at beginning 
   of period                                 -             - 
  Acquisition of assets                  2,325             - 
  Additions                                 21             - 
  Depreciation expense                    (60)             - 
                                     ---------  ------------ 
 Carrying amount at end of period        2,286             - 
                                     ---------  ------------ 
                                         2,293             - 
                                     =========  ============ 
 

NOTE 6: RESOURCE PROPERTY COSTS

 
                                                             31 December 
                                              30 June 2017       2016 
                                                EUR'000        EUR'000 
 Resource Property costs 
          Exploration Phase                          2,554             - 
         Production Phase                            3,523             - 
                                             -------------  ------------ 
                                                     6,077             - 
                                             =============  ============ 
 
 Reconciliation of carrying 
  amount of resource properties 
           Exploration Phase 
         Carrying amount at beginning 
          of period                                      -             - 
           Acquisition of assets (refer 
            note 10)                                 5,003 
           Exploration expenditure                     516             - 
           Transfer to Production phase            (2,965)             - 
           Exploration expenditure written 
            off                                          -             - 
                                             -------------  ------------ 
           Carrying amount at end of 
            period                                   2,554             - 
                                             =============  ============ 
 
   Resource property costs in the exploration and 
   evaluation phase have not yet reached a stage which 
   permits a reasonable assessment of the existence 
   of, or otherwise, economically recoverable reserves. 
   The ultimate recoupment of resource property costs 
   in the exploration phase is dependent upon the 
   successful development and exploitation, or alternatively 
   sale, of the respective areas of interest at an 
   amount greater than or equal to the carrying value. 
 
   During the period, the Group completed the development 
   of the Bezzecca field. Accumulated costs relating 
   to this field were transferred to production phase 
   assets as production commenced in the second quarter 
   of the year. 
 

NOTES TO THE INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2017

NOTE 6: RESOURCE PROPERTY COSTS (Continued)

 
                                                   30 June   31 December 
                                                     2017        2016 
           Production Phase                        EUR'000     EUR'000 
           Carrying amount at beginning 
            of period                                    -             - 
           Acquisition of assets (refer 
            note 10)                                   599 
           Additions                                     1             - 
           Transfer from exploration                 2,965 
           Change in estimate of rehabilitation 
            assets                                       -             - 
           Amortisation of producing 
            assets                                    (42)             - 
           Impairment loss                                             - 
                                                  --------  ------------ 
           Carrying amount at end of 
            period                                   3,523             - 
                                                  ========  ============ 
 

NOTE 7: PROVISIONS

 
                                  30 June   31 December 
                                     2017          2016 
                                  EUR'000     EUR'000 
 Current: 
 Employee leave entitlements           32             - 
 Other provisions                      20             - 
                                 --------  ------------ 
                                       52             - 
                                 --------  ------------ 
 
 Non-Current: 
 Restoration provision              4,992             - 
                                 ========  ============ 
 
 Reconciliation of restoration 
  provision: 
 Opening balance                    4,962             - 
 Increase in provision from 
  unwind of discount rate              30             - 
                                 --------  ------------ 
 Closing balance                    4,992             - 
                                 ========  ============ 
 
 

NOTE 8: INTEREST BEARING LIABILITIES

 
                                                              30 June       31 December 
                                                                 2017           2016 
                                                             EUR'000          EUR'000 
 Current liabilities 
 Loans                                                            393                     - 
                                                            ---------  -------------------- 
                                                                  393                     - 
                                                            =========  ==================== 
 
 Terms and debt repayment schedule: 
  Terms and conditions of outstanding loans were 
  as follows: 
                                                                            31 December 
                                                     30 June 2017               2016 
                           Nominal      Year        Face     Carrying     Face     Carrying 
                           Interest       of        value     Amount     value      Amount 
              Currency       rate      maturity    EUR'000    EUR'000   EUR'000     EUR'000 
 Unsecured 
  loans       AUD         10%         2018             393        393          -          - 
 
 

NOTES TO THE INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2017

NOTE 9: ISSUED CAPITAL

 
                              30 June                                        30 June 
                                2017      Nominal     Share      Merger        2017 
                               Number       value     Premium    Reserve      Total 
                               000's       EUR'000    EUR'000    EUR'000     EUR'000 
 Issued Capital 
  Opening balance 
  - 1 January                    50,000         60          -          -            60 
 Shares issued 
  during the year: 
 Issued for the 
  acquisition of 
  subsidiary                     50,000         58          -      9,942        10,000 
 Goodwill on acquisition 
  of subsidiary                       -          -          -    (6,478)       (6,478) 
 Issued for services 
  rendered                        3,720          4        210          -           214 
 Issued for cash 
  on subscription 
  on AIM listing                 50,000         59      2,884          -         2,943 
 Share issue costs                    -                 (639)          -         (639) 
                           ------------  ---------  ---------  ---------  ------------ 
 Closing balance 
  - 30 June 2017                153,720        181      2,455      3,464         6,100 
                           ============  =========  =========  =========  ============ 
 
                            31 December                                    31 December 
                                2016      Nominal     Share      Merger        2016 
                               Number       value     Premium    Reserve      Total 
                               000's       EUR'000    EUR'000    EUR'000     EUR'000 
 Opening balance 
 1 share issued 
  on incorporation                    -          -          -          -             - 
 Issued for cash 
  (i)                            50,000         60          -          -            60 
 Closing balance 
  - 31 December 
  2016                           50,000         60          -          -            60 
                           ============  =========  =========  =========  ============ 
 

(i) 49,999 Shares were issued for cash on 10 November 2016 and on 9 December 2016, the total shares on issue were subdivided into 50,000,000 shares.

All ordinary shares are fully paid and carry one vote per share and the right to dividends. In the event of winding up the Company, ordinary shareholders rank after creditors. Ordinary shares have a par value of GBP0.001 per share.

No dividends were paid or declared during the current period.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR GCGDCCDBBGRX

(END) Dow Jones Newswires

September 13, 2017 05:36 ET (09:36 GMT)

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