Last checked at 7 Sep 2018 07:00
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY PETRO MATAD LIMITED TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Petro Matad Limited
('Petro Matad' or the 'Company')
Interim results for the six months ended 30 June 2018
LONDON, 7 September 2018: Petro Matad Limited, the AIM quoted Mongolian oil explorer, is pleased to announce its unaudited interim results for the six months ended 30 June 2018.
Financial Summary
The Group posted a loss of $6.65 million for the six-month period ended 30 June 2018, which compares to a loss of $2.52 million for the comparable period in 2017. The Company's cash balance at 30 June 2018 was $12.54 million, which compares to a cash balance of $10.92 million on 30 June 2017. The cash position as of 30 June 2018 was substantially increased by the net fund raise of $15.98 million announced on 19 January 2018.
The Company's cash position was further enhanced by the net $17.12 million fund raise announced on 13 June 2018. Following approval at the EGM of 3 July 2018, the cash was received on 6 July 2018. As of today, the Company's cash balance plus term deposits stands at $29.73 million, which fully funds planned activities (including drilling of six wells) through to the end of 2019.
Operational Update
The Snow Leopard 1 exploration well, located in the Taats Basin of Block V, was spudded on 9 July 2018 and drilling operations are ongoing. The prospect has estimated prospective resource potential of 90 million barrels of oil and the Company will announce the well results once drilling and logging is complete, later this month. Once the rig completes operations at the Snow Leopard site it will mobilise to Block IV for drilling of the Wild Horse 1 well some 300 kilometres to the west.
As previously disclosed, the Wild Horse 1 well, which is targeting prospective resources of 480 million barrels of oil, has been named by industry specialists Wood Mackenzie as one of the top 20 exploration wells worldwide to watch in 2018. Representatives of the Company's community relations team are in Block IV preparing for the arrival of the rig.
Permitting for the drilling location on the Fox prospect in Block V, planned to spud in Q2 2019, is progressing well.
The Company's plans for drilling in Block XX in 2018 have experienced some regulatory delays, all of which have now been overcome. However, following extensive negotiations, the Company has been unable to reach agreement with the rig contractor that won the tender due to late stage changes to the contractor's proposed equipment and contracting entity. As a result, the decision has now been taken to postpone Block XX drilling until the start of the 2019 drilling season in Q2 2019.
The Company will, over the next few months and through the winter season, re-tender for drilling services. Additionally, the Company will use the time to reprocess existing seismic data over the high-graded Heron and Antelope prospects in the North of Block XX to improve their structural imaging in order to help determine which prospect to target and to optimize the drilling location. Environmental permits covering the entirety of both prospects have already been approved, as is the case for Gazelle.
Mike Buck, Chief Executive Officer of Petro Matad said:
"Operations at Snow Leopard 1 in Block V are progressing and we look forward to updating the market once the drilling has been completed. Similarly, preparations at Block IV are on track for the Wild Horse 1 well.
The delay to Block XX 2018 drilling is disappointing after the extensive efforts the Company has put in to be able to resume operations in the area. However, the delay does offer the chance to exploit logistical, operational and financial synergies to drill the three planned Block XX wells back to back during the 2019 drilling season".
Further operational updates will be provided in due course.
-Ends -
For more information, please contact:
Petro Matad Limited
Mike Buck, CEO +97 670 141 099 / +97 675 751 099
Stockdale Securities Limited (Nominated Adviser and Broker)
Richard Johnson +44 (0) 20 7601 6100
Andy Crossley
David Coaten
Stifel Nicolaus Europe Limited (Broker)
Callum Stewart +44 (0) 20 7710 7600
Nicholas Rhodes
Ashton Clanfield
FTI Consulting (Communications Advisory Firm)
Sara Powell +44 (0) 20 3727 1000
Ben Brewerton
All Reserves and Resources definitions and estimates shown in this report are based on the 2007 SPE/AAPG/WPC/SPEE Petroleum Resource Management System ("PRMS").
Technical information in this news release has been reviewed by the Company's Exploration Manager, Mr. Jerry Smart. He has 36 years of industry experience in oil and gas exploration and production with LASMO, Eni, Salamander Energy and Ophir Energy. He holds a B.Sc. in Geology from King's College, London.
Glossary
Prospective Resources | estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled
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About Petro Matad
Petro Matad is the parent company of a group focussed on oil exploration, as well as future development and production in Mongolia. At the current time, Petro Matad holds the sole operatorship of three Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 10,343 km² in the far eastern part of the country and Blocks IV and V have an area of 28,999 km2 and 21,150 km2, respectively, in the southwest part of the country.
Petro Matad Limited is incorporated in the Isle of Man under company number 1483V. Its registered office is at Victory House, Prospect Hill, Douglas, Isle of Man, IM1 1EQ.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 30 JUNE 2018
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| Consolidated | |
|
| 30 Jun 2018 | 30 Jun 2017 |
|
| $'000 | $'000 |
|
|
|
|
Continuing Operations |
|
|
|
Revenue |
|
|
|
Interest Income |
| 180 | 9 |
Other Income |
| 5 | - |
|
| 185 | 9 |
|
|
|
|
Expenditure |
|
|
|
Consultancy fees |
| (63) | (26) |
Depreciation and amortisation |
| (144) | (131) |
Employee benefits expenses |
| (2,072) | (1,156) |
Exploration expenditure |
| (2,870) | (378) |
Other expenses |
| (1,690) | (836) |
Profit/(Loss) from continuing operations before income tax |
| (6,654) | (2,518) |
Income tax expense |
| - | - |
Profit/(Loss) from continuing operations after income tax |
| (6,654) | (2,518) |
Net Loss |
| (6,654) | (2,518) |
|
|
|
|
Other comprehensive income/(loss) |
|
|
|
Exchange rate differences on translating foreign operations |
| (30) | 44 |
Other comprehensive income/(loss), net of income tax |
| (30) | 44 |
Total comprehensive loss |
| (6,684 | (2,474) |
|
|
|
|
Profit/(Loss) attributable to owners of the parent |
| (6,654) | (2,518) |
|
|
|
|
Total comprehensive income/(loss) attributable to owners of the parent |
| (6,684) | (2,474) |
|
|
|
|
Earnings/(loss) per share (cents per share) |
|
|
|
- Basic and diluted earnings/(loss) per share |
| (1.38) | (0.87) |
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
| Consolidated | ||
| 30 Jun 2018 | 31 Dec 2017 | 30 Jun 2017 |
| $'000 | $'000 | $'000 |
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents | 12,542 | 5,090 | 10,924 |
Trade and other receivables | 12 | 6 | 168 |
Prepayments | 226 | 220 | 166 |
Financial assets | 3,010 | 3,010 | - |
Inventory | 216 | 254 | 306 |
Total Current Assets | 16,006 | 8,580 | 11,564 |
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|
|
|
Non-Current Assets |
|
|
|
Exploration and evaluation | 15,275 | 15,275 | 15,275 |
Property, plant and equipment | 476 | 604 | 720 |
Total Non-Current assets | 15,751 | 15,879 | 15,995 |
TOTAL ASSETS | 31,757 | 24,459 | 27,559 |
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|
|
|
LIABILITIES |
|
|
|
Current liabilities |
|
|
|
Trade and other payables | 939 | 3,389 | 1,821 |
Total Current Liabilities | 939 | 3,389 | 1,821 |
TOTAL LIABILITIES | 939 | 3,389 | 1,821 |
NET ASSETS | 30,818 | 21,070 | 25,738 |
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EQUITY |
|
|
|
Issued capital | 126,098 | 109,769 | 107,476 |
Reserves | 2,942 | 2,980 | 4,176 |
Accumulated losses | (98,222) | (91,679) | (85,914) |
TOTAL EQUITY | 30,818 | 21,070 | 25,738 |
CONDENSED CASH FLOW STATEMENT
FOR THE HALF-YEAR ENDED 30 JUNE 2018
| Consolidated | |
| 30 Jun 2018 | 30 Jun 2017 |
| $'000 | $'000 |
|
|
|
Cash flows from operating activities |
|
|
Payments to suppliers and employees | (8,510) | (3,041) |
Interest received | 180 | 9 |
Proceeds from Bergen | - | 1,200 |
Farm-out proceeds | - | 5,000 |
Net cash flows from/(used in) operating activities | (8,330) | 3,168 |
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|
|
Cash flows from operating activities |
|
|
Purchase of property, plant and equipment | (42) | (41) |
Proceeds from the disposal of plant and equipment | 4 | - |
Net cash flows from/(used in) investing activities | (38) | (41) |
|
|
|
Cash flows from financing activities |
|
|
Proceeds from issue of shares | 15,985 | 1,921 |
Capital raising costs | (218) | (647) |
Net cash flows from/(used in) financing activities | 15,767 | 1,274 |
|
|
|
Net increase/(decrease) in cash and cash equivalents | 7,399 | 4,401 |
Net foreign exchange differences | 53 | 44 |
Cash and cash equivalents at beginning of period | 5,090 | 6,479 |
Cash and cash equivalents at end of period | 12,542 | 10,924 |
STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 30 JUNE 2018
| Consolidated | |||
| Attributable to equity holders of the parent | |||
|
Issued Capital $'000 |
Accumulated Losses $'000 |
Other Reserves $'000 |
Total $'000 |
|
|
|
|
|
As at 1 January 2017 | 106,150 | (83,396) | 4,109 | 26,863 |
Income/(Loss) for the period | - | (2,518) | - | (2,518) |
Other comprehensive income | - | - | 44 | 44 |
Total comprehensive income/(loss) for the period | 106,150 | (85,914) | 4,153 | 24,389 |
Transactions with owners in their capacity as owners |
|
|
|
|
Issue of share capital | 1,921 | - | - | 1,921 |
Cost of capital raising | (647) | - | - | (647) |
Share based payments | 52 | - | 23 | 75 |
As at 30 June 2017 | 107,476 | (85,914) | 4,176 | 25,738 |
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|
|
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|
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As at 1 January 2018 | 109,769 | (91,679) | 2,980 | 21,070 |
Income/(Loss) for the period | - | (6,654) | - | (6,654) |
Other comprehensive income | - | - | (30) | (30) |
Total comprehensive income/(loss) for the period | 109,769 | (98,333) | 2,950 | 14,386 |
Transactions with owners in their capacity as owners |
|
|
|
|
Issue of share capital | 16,895 | - | - | 16,895 |
Cost of capital raising | (1,081) | - | - | (1,081) |
Share based payments | 515 | 111 | (8) | 618 |
As at 30 June 2018 | 126,098 | (98,222) | 2,942 | 30,818 |
1. CORPORATE INFORMATION
The financial report covers the consolidated entity of Petro Matad Limited and its controlled entities.
Petro Matad Limited, a company incorporated in the Isle of Man on 30 August 2007 has four wholly owned subsidiaries, including Capcorp Mongolia LLC and Petro Matad LLC (both incorporated in Mongolia), Central Asian Petroleum Corporation Limited ("Capcorp") and Petromatad Invest Limited (both incorporated in the Cayman Islands). Its major shareholder is Petrovis Matad Inc.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The half-year financial report does not include all of the notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.
The half-year financial report should be read in conjunction with the annual Financial Report of Petro Matad Limited as at 31 December 2017. The half-year consolidated financial statements have been prepared using the same accounting policies as used in the annual financial statements for the year ended 31 December 2017.
It is also recommended that the half-year financial report is considered together with any public announcements made by Petro Matad Limited and its controlled entities during the half-year ended 30 June 2018.
(a) Basis of Preparation
The half-year consolidated financial report is a general purpose financial report, which has been prepared in accordance with the requirements of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ('IASB'). The half-year financial report has been prepared on a historical cost basis, except where stated.
The financial report is presented in US dollars and all values are rounded to the nearest thousand dollars ($'000).
For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.
(b) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at 31 December each year.
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.
A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity transaction.
All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.
3. CONTRIBUTED EQUITY
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| CONSOLIDATED | ||||||
|
|
| 30 Jun 2018 | 31 Dec 2017 | ||||
|
|
| $'000 | $'000 | ||||
Ordinary shares (i) 525,312,857 shares issued and fully paid (31 Dec 2017: 333,258,252) |
| 126,098 | 109,769 |
| ||||
|
| 126,098 | 109,769 |
| ||||
(i) Ordinary shares
Full paid ordinary shares carry one vote per share and carry the right to dividends.
Movement in ordinary shares on issue | Number of Shares | Issue Price$ | $'000 |
At 1 January 2018 | 333,258,252 |
| 109,769 |
Issue of shares through direct subscriptions on 9 Feb 2018 | 59,167,335 | $0.090 | 5,340 5,340
|
Issue of shares through its broker, Pareto on 9 Feb 2018 | 19,708,520 | $0.090 | 1,779 |
Issue of shares through its broker, Stifel on 9 Feb 2018 | 67,057,398 | $0.090 | 6,052 |
Issue of shares through its broker, Stockdale on 9 Feb 2018 | 40,654,376 | $0.090 | 3,669 |
Issue of shares to employees on 3 Apr 2018 on exercise of awards | 2,598,911 | $0.010 | 26 |
Issue of shares to directors and consultant on 16 Apr 2018 on exercise of awards | 2,868,065 | $0.010 | 29 |
Cost of capital raising |
|
| (1,081) |
Share based payment |
|
| 515 |
At 30 June 2017 | 525,312,857 |
| 126,098 |
|
|
|
|
4. RESERVES
A detailed breakdown of the reserves of the Group is as follows:
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Merger reserve | Equity benefits reserve | Foreign currency translation | Total |
Consolidated | $'000 | $'000 | $'000 | $'000 |
|
|
|
|
|
As at 1 July 2017 | 831 | 4,446 | (1,101) | 4,176 |
Currency translation differences | - | - | (26) | (109) |
Share based payments | - | (1,170) | - | 124 |
As at 31 December 2017 | 831 | 3,276 | (1,127) | 2,980 |
|
|
|
|
|
Currency translation differences | - | - | (30) | (30) |
Share based payments | - | (8) | - | (8) |
As at 30 June 2018 | 831 | 3,268 | (1,157) | 2,942 |
5. EARNINGS/(LOSS) PER SHARE
The following reflects the income and share data used in the total operations basic and diluted earnings/(loss) per share computations:
| CONSOLIDATED | |
| 30 Jun 2018 | 30 Jun 2017 |
Basic earnings/(loss) per share |
|
|
Total basic earnings/(loss) per share (US$ cents per share) (note a) | (1.38) | (0.87) |
|
|
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Diluted earnings/(loss) per share |
|
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Total diluted earnings/(loss) per share (US$ cents per share) (note b) | (1.38) | (0.87) |
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|
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(a) Basic earnings/(loss) per share |
|
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The profit/(loss) and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows: |
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|
|
|
|
|
|
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Net profit/(loss) attributable to ordinary shareholders (US$'000) | (6,654) | (2,518) |
|
|
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Weighted average number of ordinary shares for the purposes of basic earnings per share ('000) | 482,124 | 290,268 |
|
|
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(b) Diluted earnings/(loss) per share |
|
|
The profit/(loss) and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows: |
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|
|
|
|
|
|
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Net profit/(loss) attributable to ordinary shareholders (US$'000) | (6,654) | (2,518) |
|
|
|
Weighted average number of ordinary shares for the purposes of basic earnings per share ('000) | 482,124 | 290,268 |
Share Options and Conditional Share Awards could potentially dilute basic loss per share in the future, however they have been excluded from the calculation of diluted loss per share because they are anti-dilutive for both years presented.
6. EVENTS AFTER THE REPORTING DATE
On 4 July 2018, the Company issued 1,846,439 shares through direct subscriptions at a price of GBP0.10 per share.
On 4 July 2018, the Company concluded a placement by issuing 13,256,520 shares at a price of GBP0.10 per share arranged through its broker, Pareto.
On 4 July 2018, the Company concluded a placement by issuing 104,701,135 shares at a price of GBP0.10 per share arranged through its broker, Stifel.
On 4 July 2018, the Company concluded a placement by issuing 17,038,798 shares at a price of GBP0.10 per share arranged through its broker, Stockdale.
The Company's cash position was further enhanced by the $18.3 million fund raise announced on 13 June 2018. Following approval at the EGM of 3 July 2018, the cash was received on 6 July 2018.