21 Sep 2017 07:00
21 September 2017
Red Emperor Resources NL
Annual Report for the Year Ending 30 June 2017
Please see below extracts from the Company's Annual Report for the Year Ending 30 June 2017, being the:
§ Directors' Report
§ Consolidated Statement of Comprehensive Income
§ Consolidated Statement of Financial Position
§ Consolidated Statement of Cash Flows
A copy of the entire Annual Report will be sent to shareholders and is available on the Company's website - www.redemperorresources.com.
The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.
For further information please visit www.redemperorresources.com or contact:
Red Emperor
Greg Bandy +61 8 9212 0102
Grant Thornton UK LLP
Philip Secrett/Jamie Barklem +44 20 7383 5100
Directors' Report
The Directors present their report for Red Emperor Resources NL ("Red Emperor", or "the Company") and its subsidiaries ("the Group") for the year ended 30 June 2017.
Directors
The persons who were directors of Red Emperor during the year are:
Mr Greg Bandy (Managing Director) |
Mr Jason Bontempo (Non-Executive Director) Mr Nathan Rayner (Non-Executive Director) |
RESULTS OF OPERATIONS
The Company's net loss after taxation attributable to the members of Red Emperor for the year to 30 June 2017 was $758,918 (2016: $9,034,572).
DIVIDENDS
No dividend was paid or declared by the Company during the year and up to the date of this report.
CORPORATE STRUCTURE
Red Emperor Resources NL is a company limited by shares, which is incorporated and domiciled in Australia.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activity of the Company during the financial year was oil and gas exploration and project identification.
REVIEW OF OPERATIONS
PHILIPPINES (SC55)
Red Emperor provided further information to the Philippines Department of Energy (DoE) on request in the hope that the approval to have its equity interest in Block SC55 increased (from 15% to 37.5%) so a work program consisting of geological and interpretive studies can be undertaken.
Red Emperor participated in a USD $25m exploration well (Hawkeye) within the block in 2015 and contributed in excess of AUD $5m towards drilling costs. Over USD $50m has been spent exploring the block to date and a number of drill-ready targets remain, including the "Cinco" gas prospect which has a best estimate prospective resource of 1.6tcf recoverable gas. Given the Hawkeye well discovered gas and a working petroleum system relatively close to Cinco, Red Emperor believes that Block SC 55 remains a key asset for the Company to maintain exposure to.
GEORGIA
Red Emperor has been negotiating with Range Resources Limited to sell its 20% interest in Strait Oil & Gas for a nominal sum and a royalty. After a long and frustrating Joint Venture and uncertainty over the tenure of Blocks VIa and VIb, the company concluded that a divestment was both prudent and opportunistic. Full details of any proposed sale will be made available to shareholders in due course after formal documentation has been agreed and executed. The carrying value of this asset was written down to nil some time ago and the Company does not consider its shareholding to be of a core nature to its ongoing business activities or strategy.
CORPORATE
Red Emperor reviewed a number of new opportunities within the oil & gas sector with both its Australian and UK advisers respectively during the year. The Company also undertook due diligence on two assets outside the oil & gas space, specifically resource projects. While it remains focused on its current main undertaking, the board believes it to be a prudent strategy to widen its focus to include opportunities in all sectors that could potentially add value to shareholders, while it awaits formal approval from the Philippines DoE.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the Group during the financial year, other than as set out in this report.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
There have been no other significant events subsequent to the end of the financial year to the date of this report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group will continue its investment in resource projects with the object of identifying commercial resources. The Company intends to pursue acquisition and investment opportunities to secure new projects in the natural resources sector.
Greg Bandy
Managing Director - Perth, Western Australia,
21 September 2017
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2017
Note | 30 June 2017$ | 30 June 2016$ | |
Continuing Operations | |||
Interest received | 158,634 | 239,406 | |
Employee and director benefits expense | (274,103) | (265,950) | |
Professional and Consultants | (308,959) | (570,771) | |
ASX and AIM and share registry fees | (69,969) | (83,731) | |
Travel expenditure | (66,922) | (72,799) | |
Impairment expense | - | (7,711,110) | |
Realised Foreign exchange gain | - | 28,341 | |
Unrealised Foreign exchange loss | (112,584) | (423,331) | |
Share based payment expense | - | (30,934) | |
Other expenses | (85,015) | (143,693) | |
Loss before income tax | (758,918) | (9,034,572) | |
Income tax expense | - | - | |
| |||
Loss after Income Tax | (758,918) | (9,034,572) | |
Other comprehensive loss | |||
Items that may be reclassified to profit or loss | |||
Other comprehensive income/(loss) | (607) | 13,938 | |
Other comprehensive income/(loss) for the year net of tax | (607) | 13,938 | |
Total comprehensive loss for the year | (759,525) | (9,020,634) | |
Loss per share | |||
Basic loss per share (cents) | (0.18) | (2.13) | |
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. | |||
Consolidated Statement of Financial Position
as at 30 June 2017
Note | 2017$ | 2016$ | |
Current Assets | |||
Cash and cash equivalents | 1 | 10,921,315 | 11,715,540 |
Trade and other receivables | 51,727 | 33,415 | |
Total Current Assets | 10,973,042 | 11,748,955 | |
Non-Current Assets | |||
Financial assets at fair value through profit or loss | 400 | 400 | |
Exploration and evaluation expenditure | - | - | |
Total Non-Current Assets | 400 | 400 | |
Total Assets | 10,973,442 | 11,749,355 | |
Current Liabilities | |||
Trade and other payables | 53,558 | 69,946 | |
Total Current Liabilities | 53,558 | 69,946 | |
Total Liabilities | 53,558 | 69,946 | |
Net Assets | 10,919,884 | 11,679,409 | |
Equity | |||
Issued capital | 57,329,505 | 57,329,505 | |
Reserves | 4,096,272 | 4,096,879 | |
Accumulated losses | (50,505,893) | (49,746,975) | |
Total Equity | 10,919,884 | 11,679,409 | |
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. | |||
Consolidated Statement of Changes in Equity
for the year ended 30 June 2017
Issued capital$ | Accumulated losses$ | Foreign exchange translation reserve$ | Share based payments reserve $ | Total$ | |
Balance at 1 July 2015 | 52,167,148 | (40,712,403) | (28,761) | 3,867,905 | 15,293,889 |
Total comprehensive loss for the year | |||||
Loss for the year | - | (9,034,572) | - | - | (9,034,572) |
Other Comprehensive income | - | - | 13,938 | - | 13,938 |
Total comprehensive loss for the year | - | (9,034,572) | 13,938 | - | (9,020,634) |
Transactions with owners in their capacity as owners | |||||
Issue of shares | 5,763,718 | - | - | - | 5,763,718 |
Share based payments | - | - | - | 30,934 | 30,934 |
Cost of issue | (601,361) | - | - | 212,863 | (388,498) |
Balance at 30 June 2016 | 57,329,505 | (49,746,975) | (14,823) | 4,111,702 | 11,679,409 |
Balance at 1 July 2016 | 57,329,505 | (49,746,975) | (14,823) | 4,111,702 | 11,679,409 |
Total comprehensive loss for the year | |||||
Loss for the year | - | (758,918) | - | - | (758,918) |
Other Comprehensive loss | - | - | (607) | - | (607) |
Total comprehensive loss for the year | - | (758,918) | (607) | - | (759,525) |
Transactions with owners in their capacity as owners | |||||
Balance at 30 June 2017 | 57,329,505 | (50,505,893) | (15,430) | 4,111,702 | 10,919,884 |
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
for the year ended 30 June 2017
Note | 2017 $ $ | 2016 $ | |||||
Cash flows from operating activities | |||||||
Payments to suppliers and employees | (840,275) | (1,113,641) | |||||
Interest received | 158,634 | 239,406 | |||||
Finance cost | - | 28,341 | |||||
Net cash used in operating activities | (681,641) | (845,894) | |||||
Cash flows from investing activities | |||||||
Payments for exploration and evaluation | - | (5,119,286) | |||||
Refund of Hawkeye-1 well costs | - | 397,822 | |||||
Net cash used in investing activities | - | (4,721,464) | |||||
Cash flows from financing activities | |||||||
Proceeds from issue of shares and options | - | 5,600,300 | |||||
Payment of share issue costs | - | (388,498) | |||||
Net cash provided by financing activities | - | 5,211,802 | |||||
Net decrease in cash and cash equivalents | (681,641) | (355,556) | |||||
Cash and cash equivalents at beginning of year | 11,715,540 | 12,494,427 | |||||
Effects of exchange rate changes on cash and cash equivalents | (112,584) | (423,331) | |||||
Cash and cash equivalents at the end of the year | 10,921,315 | 11,715,540 | |||||
| |||||||
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. |
| ||||||
Notes to the Consolidated Financial Statements for the year ended 30 June 2017
2017$ | 2016$ |
1. Cash and Cash Equivalents
Reconciliation of cash
Cash comprises of: | ||
Cash at bank | 10,921,315 | 11,715,540 |
Reconciliation of operating loss after tax to net cash flow from operations | ||
Loss after tax | (758,918) | (9,034,572) |
Non-cash items | ||
Impairment expense | - | 7,678,546 |
Share based payment | - | 243,797 |
Net exchange differences | 111,977 | 428,327 |
Change in assets and liabilities | ||
Decrease/(increase) in trade and other receivables | (18,312) | 584,901 |
Increase/(decrease) in trade and other payables | (16,388) | (746,893) |
Net cash flow used in operating activities | (681,641) | (845,894) |