Last checked at 27 Jun 2014 07:00
27 June 2014
Lansdowne Oil & Gas plc
Audited Results for the year ended 31 December 2013
Lansdowne Oil & Gas ("Lansdowne" or "the Company") is pleased to announce its audited results, for the year ended 31 December 2013. Lansdowne is an upstream oil and gas company, focused on exploration and appraisal activities in the North Celtic Sea Basin, off the south coast of Ireland. The Company has targeted the Irish offshore shelf areas close to existing operating infrastructure for exploration, as these provide shallow water (generally less than 100 metres), and relatively low drilling costs and the Directors believe that these factors, combined with favourable fiscal terms, have the potential to deliver high value reserves.
Operational highlights
· Netherland, Sewell & Associates, Inc. (NSAI) completed its audit of the Basal Wealden oil reservoir at Barryroe.
· Total on-block audited 2C resources at Barryroe are now estimated at 311 mmbbl plus 208 bcf (69 mmboe net to Lansdowne Oil & Gas).
· In recognition of potential field extensions to the south and southeast, the Barryroe partners were granted a 180 km2 extension to SEL 1/11.
· On-behalf of the Barryroe partners, Providence Resources commenced a farm-out process and is currently in negotiations with a number of parties.
· The Amergin, Midleton, and Rosscarbery prospects have been de-risked by 3D seismic mapping and subsequent seismic inversion studies. Farm-out discussions are on-going.
Financial
· Cash balances at 31 December 2013 of £2.48 million (2012: £5.55 million).
· Operating expenses for the year were £1.0 million (2012: £1.0 million).
· Loss for year after tax of £0.81 million (2012: loss £1.09 million).
· Loss per share of 0.6 pence (2012: loss 0.9 pence).
For further information please contact:
| |
Lansdowne Oil & Gas plc Steve Boldy Richard Slape
| +353 1 495 9259 |
Cenkos Securities plc Neil McDonald Derrick Lee
| +44 (0)20 7397 8900 +44 (0) 131 220 6939 |
FTI Consulting Ben Brewerton
| +44 (0)20 3727 1000
|
Lansdowne Oil and Gas plc
Results for the year ended 31 December 2013
Chairman's Statement
Following the considerable progress made in 2012, particularly with regard to the successful appraisal drilling results at Barryroe, 2013 proved to be a year of consolidation.
The first half of the year saw the completion of a new Competent Person's Report (CPR) on the Barryroe oil field, which was carried out by Netherland, Sewell and Associates, Inc. (NSAI). Its work endorsed the previous estimates calculated by Providence Resources, the operator, and indicates that Barryroe has the potential to be a truly significant oil field, with gross 2C resources of 346 MMBOE.
Barryroe lies in relatively shallow water of around 100m off the south coast of Ireland and the additional economic modelling work carried out by NSAI yielded attractive valuation figures. The read across to Lansdowne's 20% interest is estimated to be of the order of $675 million.
Clearly, work remains to be done to move the project forward and unlock this value but headway is being made through the farm-out process that Providence is undertaking on behalf of the Barryroe partnership.
On our exploration prospects the additional seismic inversion work that we carried out yielded promising results. We believe this has further de-risked the prospects and has been helpful in our ongoing discussions with potential farminees.
The focus for much of 2013 was to conclude farm-out agreements both for Barryroe and for our exploration portfolio and this work has continued to date in 2014. Despite high oil and gas prices, the market for farm-outs has been depressed and progress has not been as rapid as we had hoped. Nevertheless, the fact remains that we hold valuable assets in the shallow water Celtic Sea and we remain optimistic that this will be recognised in due course.
There have been a number of changes to the Board during 2013. In June, Chris Moar stepped down from the Board, having served as Finance Director since the Company's flotation in April 2006. On behalf of the Board and shareholders I thank him for his sterling efforts over this period. In September, Jeffrey Auld was appointed to the Board as an independent non-executive director, bringing with him extensive experience in upstream oil and gas commercial activities.
Further changes to the Board have occurred in 2014, with the retirement of Emmet Brown and the appointment of Richard Slape as Commercial Director. The changes to the Board reflect the transition from a period dominated by technical and operational activities to a phase where the critical activity will be the consummation of farm-out agreements.
Financial results
The Group recorded a loss after tax of £0.81 million for the year ended 31 December 2013 compared to a loss after tax of £1.09 million for the year ended 31 December 2012.
Group operating expenses for the year were £0.98 million, compared to £1.02 million for 2012. Net finance expense for the year was £0.04 million (2012: £0.13 million).
Total equity attributable to the ordinary shareholders of the Group has reduced to £25.6 million as at 31 December 2013 from £26.35 million as at 31 December 2012.
Cash balances of £2.48 million (2012: £5.55 million) were held at the end of the financial year.
Outlook
Over the last few years, through the acquisition of high quality modern 3D seismic data and successful appraisal drilling at Barryroe, Lansdowne has participated in the rejuvenation of the North Celtic Sea Basin, offshore Ireland. The next phase of activity, which requires the successful conclusion of our farm-out processes, will be a new drilling campaign and we remain focused on delivering this programme.
John Greenall
Chairman
Lansdowne Oil & Gas plc
Consolidated Statement of Financial Position
As at 31 December 2013
2013 | 2012 | ||
Audited | Audited | ||
Note | £'000 | £'000 | |
Assets | |||
Non- current assets | |||
Intangible assets | 4 | 27,217 | 25,820 |
Property, plant and equipment | 1 | 1 | |
27,218 | 25,821 | ||
Current Assets | |||
Trade and other receivables | 146 | 101 | |
Cash at bank and on hand | 2,478 | 5,549 | |
2,624 | 5,650 | ||
Total Assets | 29,842 | 31,471 | |
Equity and Liabilities
| |||
Shareholders' Equity | |||
Share capital | 5 | 7,027 | 7,027 |
Share premium | 5 | 25,273 | 25,273 |
Currency translation reserve | 56 | 118 | |
Share-based payment reserve | 803 | 676 | |
Accumulated deficit | (7,556) | (6,746) | |
Total Equity
| 25,603 | 26,348 | |
Non-Current Liabilities | |||
Provision for liabilities Deferred income tax liabilities
Current Liabilities Trade and other payables
| 197 1,052 1,249
2,990
| - 1,263 1,263
3.860
| |
------- | ------- | ||
Total Liabilities | 4,239 | 5,123 | |
Total Equity and Liabilities | 29,842 | 31,471 | |
Lansdowne Oil & Gas plc
Consolidated Income Statement
For the year ended 31 December 2013
2013 | 2012 | ||
Audited | Audited | ||
Note | £'000 | £'000 | |
Administrative expenses | (984) | (991) | |
Disposal of intangible assets | - | (29) | |
Operating loss | (984) | (1,020) | |
Finance costs | (61) | (140) | |
Finance income | 24 | 13 | |
Loss for the year before tax | (1,021) | (1,147) | |
Income tax credit | 211 | 53 | |
Loss for the year | (810) | (1,094) | |
Loss per share (pence): | |||
Basic loss per ordinary share | 3 | (0.6p) | (0.9p) |
Diluted loss per ordinary share | 3 | (0.6p) | (0.9p) |
The results for the period all arise on continuing operations
Lansdowne Oil & Gas plc
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2013
2013 £'000
| 2012 £'000
| |
Loss for the year | (810) | (1,094) |
Items that may be reclassified to profit and loss account | ||
Currency translation differences | (62) | 53 |
Total comprehensive loss for the year | (872) | (1,041) |
Lansdowne Oil & Gas plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2013
Share capital £'000 |
Share premium £'000 | Share based payment Reserve £'000 | Currency translation reserves £'000 |
Accumulated deficit £'000 |
Total equity £'000 | |
At 1 January 2012 | 6,118 | 16,736 | 576 | 65 | (5,652) | 17,843 |
Loss for the financial year | - | - | - | - | (1,094) | (1,094) |
Currency translation difference | - | - | - | 53 | - | 53 |
Total comprehensive income for the year | 6,118 | 16,736 | 576 | 118 | (6,746) | 16,802
|
Share based payments charge | - | - | 100 | - | - | 100 |
Issues of new shares - gross consideration | 909 | 9,091 | - | - | - | 10,000 |
Cost of share issues | - | (554) | - | (554) | ||
At 31 December 2012 | 7,027 | 25,273 | 676 | 118 | (6,746) | 26,348 |
| ||||||
At 1 January 2013 | 7,027 | 25,273 | 676 | 118 | (6,746) | 26,348 |
Loss for the financial year | - | - | - | - | (810) | (810) |
Currency translation difference | - | - | - | (62) | - | (62) |
Total comprehensive income for the year | 7,027 | 25,273 | 676 | 56 | (7,556) | 25,476 |
Share based payments charge | - | - | 127 | - | 127 | |
At 31 December 2013 | 7,027 | 25,273 | 803 | 56 | (7,556) | 25,603 |
Lansdowne Oil & Gas plc
Consolidated Statement of Cash Flows
For the year ended 31 December 2013
Note |
2013 |
2012 | |
Audited | Audited | ||
£'000 | £'000 | ||
Cash flows from operating activities | |||
Cash from operations | 6 | (1,674) | 1,111 |
Net finance expense | 3 | 127 | |
Net cash from operating activities | (1,671) | 1,238 | |
Cash flows from investing activities | |||
Acquisition of intangible exploration assets | (1,397) | (8,063) | |
Interest received | 24 | 13 | |
Net cash from investing activities | (1,373) | (8,050) | |
Cash flows from financing activities | |||
Proceeds from issuance of ordinary shares | - | 9446 | |
Repayment of borrowings | - | (173) | |
Interest paid | - | (114) | |
Net cash from financing activities | - | 9,159 | |
Net (decrease)/increase in cash and cash equivalents | (3,044) | 2,347 | |
Cash and cash equivalents at beginning of year | 5,549 | 3,228 | |
Effect of exchange rate fluctuations on cash held | (27) | (26) | |
Cash and cash equivalents at end of year | 2,478 | 5,549 | |
Lansdowne Oil & Gas plc
Notes to the Financial Information
For the year ended 31 December 2013
1. Basis of presentation
The consolidated financial statements are presented in Sterling, the groups functional currency, and all values are rounded to the nearest thousand (£000) except where otherwise indicated.
The Directors have prepared the financial statements on the going concern basis which assumes that the Group and Company will continue in operational existence for at least twelve months from the date of these accounts as described below.
The company has progressed the development of the exploration licences held by way of further appraisal and 3D seismic surveys and participation in the successful drilling campaign on the Barryroe oil discovery. The results from the 3D seismic surveys and the flow rates from the Barryroe well exceeded expectations. The Directors have appointed Macquarie Capital to commence a farm out process across its portfolio of licences, in order to find a partner(s) to participate in the next stage drilling. A data room is operational with a number of interested parties currently reviewing the information contained therein.
The Directors are confident that with the positive results from the seismic surveys and the successful Barryroe well test, they will be able to conclude a farm out deal(s) which will provide sufficient resources for the Company to continue with the development of the licences held. The Directors believe that the Company has a number of available funding options; the Company's primary aim is to conclude the ongoing farm out campaign with a view to attracting industry partners to drill wells. The Company also has the option of issuing new equity, and is also in discussions with certain financial institutions regarding a structured financing package that would provide the company with sufficient resources to progress the licences in the near term. The Company retains the financial support of its main shareholders, if required, in order to allow the Company time to evaluate these future requirements in the best interest of the Company and its shareholders.
The Directors have also reviewed cash flow projections for the period to 30 June 2015 in light of the Company and Group's existing commitments and its expected future capital expenditure programme.
The Directors believe that at the date of these financial statements there exists a material uncertainty regarding whether or not the Company will be successful in raising the required future funding to progress the development of the licences held, which may cast significant doubt upon the ability of the Company to continue as a going concern and therefore to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, after making enquiries and considering all the relevant factors, the Directors are of the opinion that with the current level of interest in the farm out process and the other available funding options, the Company will be able to source the necessary funds.
Accordingly, the Directors have a reasonable expectation that the Group and Company will have adequate resources to continue in operational existence for the foreseeable future and have therefore concluded that it is appropriate to adopt the going concern basis in preparing these financial statements. The financial statements do not include any adjustments that may result if the Group and Company was unable to continue as going concerns.
2. Segmental reporting
The Directors believe that the Group has only one reportable operating and geographic segment, which is the exploration for oil and gas reserves in Ireland. All operations are classified as continuing and currently no revenue is generated from the operating segment.
The Chief Executive monitors the operating results of its operating segment for the purposes of making decisions and performance assessment. Segment performance is evaluated based on operating profit or loss and is reviewed consistently with operating profit or loss in the consolidated financial statements.
3. Loss per ordinary share
The loss for the year was wholly from continuing operations.
(pence per share) | ||
2013 | 2012 | |
Loss per share arising from continuing operations attributable to the equity holders of the Company | ||
- basic and diluted | (0.6) | (0.9) |
The calculations were based on the following information.
Loss for the year attributable to equity holders | (810) | (1,094) |
Weighted average number of ordinary shares in issue | ||
- basic and diluted | 140,540,159 | 128,535,058 |
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The Group has two classes of potential ordinary shares; share options and share warrants. As a loss was recorded for both 2013 and 2012, potentially issuable shares would have been antidilutive.
4. Goodwill and other intangible assets
Exploration / appraisal assets |
Goodwill |
Total | ||
£'000 |
£'000 |
£'000 | ||
Cost | ||||
At 1 January 2013 | 24,399 | 1,421 | 25,820 | |
Additions | 1.397 | - | 1,397 | |
Reclassification | 1,421 | (1,421) | ||
At 31 December 2013 | 27,217 | - | 27,217 | |
Net book values | ||||
At 31 December 2013 | 27,217 | - | 27,217 | |
At 31 December 2012 | 24,399 | 1,421 | 25,820 | |
Oil and gas project expenditures, all of which relate to Ireland, including geological, geophysical and seismic costs, are accumulated as intangible fixed assets prior to the determination of commercial reserves.
The Directors have reconsidered acquisition payments for Milesian Oil & Gas Limited and determined that payments made relate to exploration and appraisal assets, rather than goodwill arising on the acquisition of a subsidiary.
The disposal in 2012 of £29,375 relates to the write off of expenditure on the Lee licence area as the directors have decided not to renew this licence because it is not considered a viable project.
5. Share capital and premium- Group and Company
Number of shares (thousands) | Ordinary shares £'000 | Share premium £'000 |
Total £'000 | |
At 1 January 2013 | 140,540 | 7,027 | 25,273 | 32,300 |
Issued in year | - | - | - | - |
At 31 December 2013 | 140,540 | 7,027 | 25,273 | 32,300 |
6. Reconciliation of loss before income tax to cash used in operations
2013 | 2012 | |
£ | £ | |
Loss before income tax | (1,021) | (1,147) |
Adjustment for: | ||
Disposal of intangible asset | - | 29 |
Equity settled share-based payment transactions | 127 | 100 |
Unrealised foreign exchange gains | (62) | 53 |
Operating cash flows before movements in working capital |
(956) |
(965) |
Change in trade and other receivables | (45) | (65) |
Change in trade and other payables | (673) | 2,141 |
Net cash used in operations | (1,674) | 1,111 |
7. Accounts
Copies of the annual accounts for the year ended 31 December 2013 will be sent to shareholders shortly and will be available from the Company's office at 6 Northbrook Road, Ranelagh, Dublin 6, Ireland and the Company's website www.lansdowneoilandgas.com.
Notes to Editors
About Lansdowne
Lansdowne Oil & Gas (LOGP.LN) is a North Celtic Sea focussed, oil and gas exploration company quoted on the AIM market and head quartered in Dublin.
Lansdowne holds extensive acreage and has acquired widespread proprietary 3D seismic data in the North Celtic Sea basin, an emerging under-explored province. Lansdowne has a balanced, technically mature portfolio , covering both oil and gas prospects, in three play types with substantial equity stakes and adjacent to existing infrastructure.
In addition to its 20% stake in the transformational Barryroe field, Lansdowne has three drill ready prospects defined on 2011 3D seismic data , with a farm-out data room exercise on-going to identify partners for a three well drilling programme.
For more information on Lansdowne, please refer to www.lansdowneoilandgas.com