27 Feb 2020 07:10
27 February 2020
Red Emperor Resources NL
Half Year Report for the Six Months Ended 31 December 2019
The Board of Red Emperor Resources NL (ASX/AIM: RMP) ("RMP", "Red Emperor" or the "Company"), the natural resource exploration company with oil and gas interests on the Alaska North Slope and in South East Asia, is pleased to announce its unaudited interim results for the 6 months to 31 December 2019.
Please see below extracts from the Company's Half Year Report for the period ended 31 December 2019, being the:
- Directors' Report
- Consolidated Statement of Profit or Loss and Other Comprehensive Income
- Consolidated Statement of Financial Position
- Consolidated Statement of Changes in Equity
- Consolidated Statement of Cash Flows
A copy of the full Half Year Report is available on the Company's website - www.redemperorresources.com
For further information, please visit www.redemperorresources.com or contact:
Red Emperor Resources NL | +61 8 9212 0102 |
Greg Bandy |
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Strand Hanson Limited (Nominated Adviser) | +44 (0) 20 7409 3494 |
James Harris |
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Brandon Hill Capital (UK Broker) | +44 (0) 203 463 5010 |
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708 Capital Pty Ltd (Australian Broker) | +61 (0) 2 9112 2500 |
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The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.
Directors' Report
The Directors are pleased to present their report for Red Emperor Resources NL ("Red Emperor" or the "Company") and its subsidiaries (the "Group") for the half year ended 31 December 2019.
DIRECTORS
The persons who were directors of Red Emperor during the half year and up to the date of this report are:
·; Greg Bandy (Managing Director)
·; Aaron Bertolatti (Director & Company Secretary)
·; Jason Bontempo (Non-Executive Director)
REVIEW OF OPERATIONS
Perth Basin, Western Australia
In early December 2019, the Company entered into a binding Letter of Intent ("LOI") with Pilot Energy Limited (ASX: PGY) ("Pilot Energy") and Key Petroleum Limited (ASX: KEY) ("Key Petroleum") (together, the Joint Venture ("JV") partners) in order to secure an option to acquire a 70% operated interest in the offshore Perth Basin exploration permit, WA-481-P.
Pursuant to the terms of the LOI, Red Emperor agreed to fund the completion of an existing committed work programme comprising geological and geophysical studies required to be undertaken within the final year of the current permit term, up to a capped amount of A$150,000. Contemporaneous with such work programme, the existing JV partners, Pilot Energy (60% interest) and Key Petroleum (40% interest), in conjunction with Red Emperor, have formally applied to the National Offshore Petroleum Titles Administrator ("NOPTA") for a renewal of the permit, which expired on 19 February 2020.
On completion of the work programme, currently being managed and administered by Key Petroleum, and a favourable renewal decision from NOPTA, Red Emperor will have the exclusive option to acquire a 70% interest in, and the right to operate (subject to any requisite regulatory approval(s)), WA-481-P, in return for paying the JV partners, collectively, A$500,000. Red Emperor has until 15 business days after NOPTA's approval of the permit renewal application to exercise such option. A renewal decision is currently expected to be received in Q1 2020.
For further details, please refer to the Company's AIM announcement of 2 December 2019.
Alaska North Slope
During the reporting period, the consortium partners purchased additional regional 3D seismic data within ADL#s 391718, 391719, 391720 & 391721 (collectively, the "Western Blocks"), and the consortium is currently reviewing its plans to either reprocess / reinterpret the legacy 3D seismic data or seek to monetise the blocks.
Philippines (Block SC55)
On 26 August 2019, the 4-month extension to the moratorium period granted by the Philippine's Department of Energy ("DoE") expired. The Joint Venture then sought to enter into Sub-Phase 5 which required further, significant expenditure including the commitment to drill an exploration well in 2020.
The Board decided that this was not the optimum use of shareholder funds and as a result, during Q4 2019, the Company advised the operator, Palawan55, of its intention to withdraw from the Joint Venture and have its equity interest re-assigned. Red Emperor still awaits formal approval of the reassignment of its equity interest in Block SC55 from the PoE and will advise shareholders once this has occurred.
Corporate
In August 2019, Mr. Gracjan Lambert, Chief Executive Officer, resigned from the Company, by mutual agreement, in order to pursue his other business interests.
During the Period, Red Emperor retained the services of Mr. John Begg on a part-time basis to assist with introducing and reviewing business opportunities. John is an expert, upstream oil and gas project generator and deal closer. With decades of experience in equity capital markets, John is an industry-leading geoscientist who has lived and worked with consistently high business impact in Australia, developing SE Asian countries, the UK, Middle East and the USA.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
Subsequent to the reporting period end, the Company transferred A$150,000 to the JV partners of the offshore Perth Basin exploration permit WA-481-P to fund the completion of an existing committed work programme comprising geological and geophysical studies required to be undertaken within the final year of the current permit term.
There are no other significant events subsequent to the end of the Period to the date of this report.
AUDITOR'S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires the Company's auditors to provide the Directors of the Company with an Independence Declaration in relation to their review of the interim financial report. This Independence Declaration is set out on page 4 and forms part of this Directors' report for the half-year ended 31 December 2019.
This report is signed in accordance with a resolution of the Board of Directors made pursuant to section 306(3) of the Corporations Act 2001.
Signed on behalf of the board in accordance with a resolution of the Directors.
Greg Bandy
Managing Director
Perth, Western Australia
27 February 2020
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the half-year ended 31 December 2019
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| 31-Dec-19 | 31-Dec-18 |
$ | $ | ||
Continuing Operations |
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Interest received |
| 13,412 | 52,602 |
Sale of subsidiary - Georgian Oil Pty Ltd |
| - | 26,976 |
Unrealised foreign exchange gain |
| 1,154 | 26,585 |
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Employee and director benefits expense |
| (136,706) | (245,049) |
Professional and consultants |
| (114,124) | (123,742) |
ASX and AIM and share registry fees |
| (86,550) | (70,996) |
Exploration expenditure written off |
| (93,999) | - |
Share based payment expense |
| - | (700,330) |
Other expenses |
| (81,203) | (324,406) |
Loss before income tax |
| (498,016) | (1,358,360) |
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Income tax expense |
| - | - |
Loss after Income Tax |
| (498,016) | (1,358,360) |
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Other comprehensive income/(loss) |
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Items that may be reclassified to profit or loss |
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Foreign currency translation differences |
| 54 | 160,936 |
Other comprehensive income for the period net of tax |
| 54 | 160,936 |
Total comprehensive loss for the period |
| (497,962) | (1,197,424) |
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Loss per share for the period attributable to the members of Red Emperor Resources NL | |||
Basic and diluted loss per share (cents) |
| (0.09) | (0.32) |
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 31 December 2019
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| 31-Dec-19 | 30-Jun-19 |
Note | $ | $ | |
Current Assets |
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Cash and cash equivalents |
| 5,105,357 | 5,642,936 |
Trade and other receivables |
| 40,171 | 36,881 |
Total Current Assets |
| 5,145,528 | 5,679,817 |
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Non-Current Assets |
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Deferred exploration & evaluation expenditure | 3 | - | - |
Total Non-Current Assets |
| - | - |
Total Assets |
| 5,145,528 | 5,679,817 |
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Current Liabilities |
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Trade and other payables |
| 28,952 | 65,279 |
Total Current Liabilities |
| 28,952 | 65,279 |
Total Liabilities |
| 28,952 | 65,279 |
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Net Assets |
| 5,116,576 | 5,614,538 |
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Equity |
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Issued capital | 4 | 61,811,451 | 61,811,451 |
Reserves | 5 | 5,270,442 | 5,270,388 |
Accumulated losses | 6 | (61,965,317) | (61,467,301) |
Total Equity |
| 5,116,576 | 5,614,538 |
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
for the half-year ended 31 December 2019
| Issued capital | Accumulated losses | Foreign exchange translation reserve | Share based payments reserve | Total |
$ | $ | $ | $ | $ | |
Balance at 1 July 2018 | 57,329,505 | (51,195,990) | (14,874) | 4,111,702 | 10,230,343 |
Total comprehensive loss for the period |
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Loss for the period | - | (1,358,360) | - | - | (1,358,360) |
Other comprehensive income | - | - | 160,936 | - | 160,936 |
Total comprehensive income/(loss) for the period | - | (1,358,360) | 160,936 | - | (1,197,424) |
Transactions with owners in their capacity as owners |
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Proceeds from options issued during the period | - | - | - | 2,400 | 2,400 |
Share based payments | - | - | - | 700,330 | 700,330 |
Balance at 31 December 2018 | 57,329,505 | (52,554,350) | 146,062 | 4,814,432 | 9,735,649 |
Balance at 1 July 2019 | 61,811,451 | (61,467,301) | 255,417 | 5,014,971 | 5,614,538 |
Total comprehensive loss for the period |
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Loss for the period | - | (498,016) | - | - | (498,016) |
Other comprehensive income | - | - | 54 | - | 54 |
Total comprehensive income/(loss) for the period | - | (498,016) | 54 | - | (497,962) |
Transactions with owners in their capacity as owners |
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Balance at 31 December 2019 | 61,811,451 | (61,965,317) | 255,471 | 5,014,971 | 5,116,576 |
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
for the half-year ended 31 December 2019
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| 31-Dec-19 | 31-Dec-18 |
$ | $ | ||
Cash flows from operating activities |
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Payments to suppliers and employees |
| (457,045) | (796,261) |
Interest received |
| 13,412 | 52,602 |
Net cash used in operating activities |
| (443,633) | (743,659) |
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Cash flows from investing activities |
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Payments for exploration and evaluation |
| (93,999) | (3,890,334) |
Payment of performance bond |
| - | (1,454,779) |
Proceeds from sale of subsidiary - Georgian Oil Pty Ltd |
| - | 26,976 |
Net cash used in investing activities |
| (93,999) | (5,318,137) |
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Cash flows from financing activities |
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Proceeds from issue of options |
| - | 2,400 |
Net cash provided by financing activities |
| - | 2,400 |
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Net decrease in cash and cash equivalents |
| (537,632) | (6,059,396) |
Cash and cash equivalents at beginning of period |
| 5,642,936 | 10,344,621 |
Effects of exchange rate changes on cash and cash equivalents |
| 53 | 160,936 |
Cash and cash equivalents at the end of the period |
| 5,105,357 | 4,446,161 |
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The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
About Red Emperor Resources NL
Red Emperor Resources NL is an Australian natural resource exploration company listed on both the Australian Securities Exchange (ASX: RMP) and the AIM Market (AIM: RMP). Red Emperor has oil and gas interests on the Alaska North Slope and in South East Asia. In addition, in December 2019 it entered into a binding letter of intent to secure an option to acquire a 70 per cent. operated interest in the offshore Perth Basin exploration permit WA-481-P.