Half-year Report

RNS Number : 3609Y
Mosman Oil and Gas Limited
02 March 2017
 

 

 

2 March 2017

 

 

Mosman Oil and Gas Limited

("Mosman" or the "Company")

 

 

Condensed Consolidated Half Year Financial Report

for the 6 months ended 31 December 2016

 

The Directors of Mosman Oil and Gas Limited (AIM: MSMN) the New Zealand ("NZ") and Australia focussed oil exploration and development company, today released the Company's Condensed Consolidated Half Year Financial Report for the 6 months ended 31 December 2016.

 

A copy of the report is also available to download from the Company's website:

 www.mosmanoilandgas.com.

 

Enquiries:

Mosman Oil & Gas Limited

John W Barr, Executive Chairman

Andy Carroll, Technical Director

jwbarr@mosmanoilandgas.com

acarroll@mosmanoilandgas.com

 

NOMAD and Broker

SP Angel Corporate Finance LLP

Stuart Gledhill / Richard Hail

+44 (0) 20 3470 0470

 

Gable Communications Limited

Justine James /  John Bick

+44 (0) 20 7193 7463

mosman@gablecommunications.com

 


  Updates on the Company's activities are regularly posted on its website

  www.mosmanoilandgas.com

 



 

 

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income for

The Half Year Ended 31 December 2016

All amounts are in Australian Dollars

 


Notes

Consolidated

31 December 2016

$

Consolidated

31 December 2015

$





Interest income


1,629

664

Other income


2,108

1,931





Administrative expenses


(95,624)

(167,600)

Corporate expenses

2

(497,858)

(693,285)

Exploration expenses incurred not capitalised


-

(28,823)

Employee benefits expense


(35,157)

(33,381)

Loss on foreign exchange


(77,671)

(135,915)

Depreciation expense


(7,092)

(7,785)

Finance expense


-

(432)

Costs associated with abandoned acquisitions

3

(138,733)

(1,161,446)

Impairment expense


-

(1,456,942)

Loss from ordinary activities before income tax expense


(848,398)

(3,683,014)




  

Income tax expense


-

-





Net loss for the period


(848,398)

(3,683,014)





Other comprehensive income


(7,824)

300,804

Total comprehensive income attributable to members of the entity


(856,222)

(3,382,210)





Basic and diluted earnings/(loss) per share


(0.41) cents

(2.14) cents

 

 

 

The accompanying notes form part of these financial statements.

 



 

 

Condensed Consolidated Statement of Financial Position

As at 31 December 2016

All amounts are in Australian Dollars

 


Notes

Consolidated

31 December 2016

Consolidated

30 June 2016

 



$

$





Current Assets




Cash and cash equivalents


2,254,540

3,758,556

Trade and other receivables

5

202,663

194,115

Available for sale financial assets

4

758,663

-

Other assets

6

24,464

446,095

Other financial assets


-

7

Total Current Assets


3,240,330

4,398,773





Non-Current Assets




Property, plant & equipment


219,028

224,448

Capitalised oil and gas exploration expenditure

7

11,329,983

10,955,203

Total Non-Current Assets


11,549,011

11,179,651





Total Assets


14,789,341

15,578,424





Current Liabilities




Trade and other payables

8

226,875

177,692

Provisions


14,154

11,846

Total Current Liabilities


241,029

189,538





Net Assets


14,548,312

15,388,886





Shareholders' Equity




Contributed equity

9

24,335,869

25,235,869

Reserves


1,312,434

1,304,610

Accumulated losses


(11,099,991)

(11,151,593)





Total Shareholders' Equity


14,548,312

15,388,886





 

 

 

The accompanying notes form part of these financial statements.

 



 

 

Condensed Consolidated Statement of Changes in Equity

for the Half Year Ended 31 December 2016

All amounts are in Australian Dollars

 


Accumulated

Losses

Contributed Equity

Reserves

Total


$

$

$

$

 

Balance at 1 July 2015

(6,256,828)

18,585,595

780,785

13,109,552






Comprehensive income





Loss for the period

(3,683,014)

-

-

(3,683,014)

Other comprehensive income for the period

-

-

300,804

300,804

Total comprehensive loss for the period

(3,683,014)

-

300,804

(3,382,210)






Transactions with owners, in their capacity as owners, and other transfers:





Shares issued to shareholders

-

7,242,293

-

7,242,293

Capital raising costs

-

(569,535)

-

(569,535)

Total transactions with owners and other transfers

-

6,672,758

-

6,672,758

Balance at 31 December 2015

(9,939,842)

25,258,353

1,081,589

16,400,100











Balance at 1 July 2016

(11,151,593)

25,235,869

1,304,610

15,388,886






Comprehensive income





Loss for the period

(848,398)

-

-

(848,398)

Other comprehensive income for the period

-

-

7,824

7,824

Total comprehensive loss for the period

(848,398)

-

7,824

(840,574)






Transactions with owners, in their capacity as owners, and other transfers:





Cancellation of shares on selective share buyback

900,000

(900,000)

-

-

Total transactions with owners and other transfers

900,000

(900,000)

-

-

Balance at 31 December 2016

(11,099,991)

24,335,869

1,312,434

14,548,312

 

 

These accompanying notes form part of these financial statements

 



 

 

Condensed Consolidated Statement of Cash Flows

for the Half Year Ended 31 December 2016

All amounts are in Australian Dollars

 



Consolidated

31 December 2016

Consolidated

 31 December 2015



$

$





Cash flows from operating activities




Interest received & other income


3,485

2,595

Payments to suppliers and employees


(663,232)

(1,152,439)

Interest paid


-

(432)

Net cash used in operating activities


(659,747)

(1,150,276)





Cash flows from investing activities




Payments for property, plant & equipment


-

(16,958)

Proceeds from/(payments) for exploration and evaluation


(311,025)

11,230

Payments for AFS financial assets


(394,511)

-

Costs associated with abandoned acquisitions


(138,732)

(1,251,446)

Deposits associated with abandoned


-

(468,735)

Bonds refunded


-

46,096

Net cash used in investing activities


(844,268)

(1,679,813)

 

Cash flows from financing activities




Proceeds from shares issued


-

7,242,293

Payments for costs of capital


-

(569,535)

Net cash provided by financial activities

-

6,672,758





Net (decrease) / increase in cash and cash equivalents

(1,504,015)

3,842,669

Cash and cash equivalents at the beginning of the financial period


3,758,555

1,117,855

Cash and cash equivalents at the end of the financial period

 

 

2,254,540

4,960,524





 

 

 

The accompanying notes from part of these financial statements


Condensed Notes to the Financial Statements

for the Half-Year Ended 31 December 2016

All amounts are Australian Dollars

 

1. Summary of Significant Accounting Policies

 

   Statement of Compliance

 

The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 'Interim Financial Reporting'. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS34 'Interim Financial Reporting'. The half-year report does not include notes of the type normally included in an annual financial report and should be read in conjunction with the most recent annual financial report.

 

Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts presented in Australian dollars, unless otherwise noted.

 

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company's 2016 annual financial report for the financial year ended 30 June 2016, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

 

Adoption of new or revised accounting standards and interpretations

 

The Group has adopted all of the new and revised standards and interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half-year. The Group has not early adopted any accounting standards or interpretations.

 

The adoption of all new and revised standards and interpretations has not resulted in any changes to the Group's accounting policies and has no effect on the amounts reported for the current or prior half-years.

 

 

Exploration and Evaluation Costs

 

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward in respect of an area that has not at reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or relating to, the area of interest are continuing.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Notes to the Financial Statements

for the Half-Year Ended 31 December 2016

All amounts are Australian Dollars

 

1. Summary of Significant Accounting Policies (Continued)

 

Impairment of Exploration and Evaluation Assets

 

The ultimate recoupment of the value of exploration and evaluation assets, is dependent on the successful development and commercial exploitation, or alternatively, sale, of the exploration and evaluation assets.

 

Impairment tests are carried out when there are indicators of impairment in order to identify whether the asset carrying values exceed their recoverable amounts. There is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts.

 

The key areas of judgement and estimation include:

 

·      Recent exploration and evaluation results and resource estimates;

·      Environmental issues that may impact on the underlying tenements;

·      Fundamental economic factors that have an impact on the operations and carrying values of assets and liabilities.

 

Segment Reporting

 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance.

 

Financial assets

 

Classification

 

The group classifies its financial assets in the following categories:

·      financial assets at fair value through profit or loss,

·      loans and receivables,

·      held-to-maturity investments, and

·      available-for-sale financial assets.

 

The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at the end of each reporting period. See note 7 for details about each type of financial asset.

 

Recognition and derecognition

 

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.

 

When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified to profit or loss as gains and losses from investment securities.

 

Measurement

 

At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

 

1. Summary of Significant Accounting Policies (Continued)

 

Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value are recognised as follows:

·      for financial assets at fair value through profit or loss' - in profit or loss within other income or other expenses

·      for available-for-sale financial assets that are monetary securities denominated in a foreign currency - translation differences related to changes in the amortised cost of the security are recognised in profit or loss and other changes in the carrying amount are recognised in other comprehensive income

·      for other monetary and non-monetary securities classified as available-for-sale - in other comprehensive income.

 

 

Impairment

 

The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator that the assets are impaired.

 

If there is objective evidence of impairment for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is removed from equity and recognised in profit or loss.

 

Impairment losses on equity instruments that were recognised in profit or loss are not reversed through profit or loss in a subsequent period.

 

If the fair value of a debt instrument classified as available-for-sale increases in a subsequent period and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through profit or loss.

 

 



 

Condensed Notes to the Financial Statements

for the Half-Year Ended 31 December 2016

All amounts are Australian Dollars

 

 

 

Consolidated

31 December 2016

Consolidated

     31 December 2015


$

$

2.    Corporate Costs


Accounting, Company Secretary and Audit fees

71,362

157,051

Director fees

60,000

60,000

Consulting fees

332,864

391,661

Travel fees

-

15,074

Legal fees

33,632

69,499


497,858

693,285

 


Consolidated

31 December 2016

Consolidated

31 December 2015

3.    Costs associated with abandoned acquisitions

$

$

Opening Balance

-

-

Costs Incurred 

138,733

1,405,370

Reimbursement from Joint Participation Agreement*

-

(243,924)


138,733

1,161,446

 

*Reimbursement of costs relate to the contributions received from High Peak Royalties Limited (ASX.HPR) under the Joint Participation Agreement.

 


Consolidated

31 December 2016

Consolidated

     30 June

2016

4.    Available-for-sale assets

$

$

Shares held in Gem International Resources Inc.

410,088

-

Shares held in Hemisphere Energy Corporation

348,575

-


758,663

-

 

 


Consolidated

31 December 2016

Consolidated

     30 June

2016

5.    Trade and other receivables

$

$

Deposits

150,955

150,533

GST receivable

51,708

43,419

Other deposits

-

163


202,663

194,115

 

 


Consolidated

31 December 2015

Consolidated

     30 June

2015

6.    Other assets

$

$

Prepayments

24,464

22,546

Share applications

-

423,549


24,464

446,095

Condensed Notes to the Financial Statements

for the Half-Year Ended 31 December 2016

All amounts are Australian Dollars

 





Consolidated

31 December 2016

Consolidated

     30 June

2016

7.    Capitalised mineral exploration expenditure

$

$

Costs brought forward

10,955,203

11,733,041

Exploration costs incurred during the year

310,842

1,480,667

Exploration expenditure impaired

-

(1,456,942)

Exploration expenditure written off

-

(1,293,295)

FX movement

63,938

491,732

Carrying value at the end of the period

11,329,983

10,955,203






Consolidated

31 December 2016

Consolidated

     30 June

2016

8.    Trade and other payables

$

$

Trade creditors

161,820

66,448

Other creditors and accruals

65,055

111,244


226,875

177,692

 


 

Consolidated

31 December 2016

Consolidated

     30 June

2016

9.    Contributed Equity

$

$

Ordinary Shares



Total shares at 31 Dec 16 206,591,008 (30 June 2016: 215,591,008) ordinary shares fully paid

24,335,869

25,235,869




a) Shares movements during the half-year

Value of shares

$

No. of shares

 

Balance at 30 June 2016

25,235,869

215,591,008


Cancellation of shares on selective share buyback*

(900,000)

(9,000,000)

Balance at 31 December 2016

24,335,869

206,591,008




 

*Note that the selective share buyback was for a nominal value of $1 only. The accounting adjustment required of $900,000 was to reverse the fair value of consideration recognised on acquisition of Petroleum Portfolio Pty Ltd which was subsequently reversed as a result of the shareholders' approval of the selective share buy back on 2 August 2016. Following the above transaction, the share capital was reduced by 9,000,000 shares and was cancelled pursuant to section 257H of the Corporation's Act 2001 Cth.

 

 

 

 

 

 

 

 

Condensed Notes to the Financial Statements

for the Half-Year Ended 31 December 2016

All amounts are Australian Dollars

 


Consolidated

31 December 2016

Consolidated

     30 June

2016


No. of Options

No. of Options

9.    Contributed Equity (Continued)



Options



During the period no options were issued:

7,859,372

7,859,372




Of the 7,859,372 options on issue as at 31 December 2016, the following are held by directors of the Company:

J W Barr

2,500,000



A Carroll

2,000,000



J Young

1,500,000







   Option details







  Number of options

       Exercise date

          Exercise price ($)

   3,800,000

       28 November 2017

          0.58

   3,200,000

       13 January 2019

          0.15

   859,372

       20 March 2019

          0.08 Great British pence

   7,859,372


         

 

10        Segment Information

 

The Group has identified its operating segments based on the internal reports that are reviewed and used by the board to make decisions about resources to be allocated to the segments and assess their performance.

 

Operating segments are identified by the board based on the Oil and Gas projects in Australia, and New Zealand. Discrete financial information about each project is reported to the board on a regular basis.

 

The reportable segments are based on aggregated operating segments determined by the similarity of the economic characteristics, the nature of the activities and the regulatory environment in which those segments operate.

 

The Group has two reportable segments based on the geographical areas of the mineral resource and exploration activities in Australia and New Zealand. Unallocated results, assets and liabilities represent corporate amounts that are not core to the reportable segments.

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Notes to the Financial Statements

for the Half-Year Ended 31 December 2016

All amounts are Australian Dollars

 

10        Segment Information (Continued)

 

 (i)       Segment performance





New Zealand

$

Australia

$

Total

$

Half-Year Ended 31 December 2016




Revenue




Interest revenue

-

1,629

1,629

Other income

2,108

-

2,108

Segment revenue

2,108

1,629

3,737





Segment Result




-     Corporate costs

(23,850)

(474,008)

(497,858)

-     Administrative costs

(25,211)

(47,700)

(72,911)

-     Foreign exchange gain/(loss)

-

(77,671)

(77,671)

Segment net profit/(loss) before tax

(46,953)

(597,750)

(644,703)









Reconciliation of segment result to net loss before tax




Amounts not included in segment result but reviewed by the Board




-

Projects abandoned

(2,126)

(136,607)

(138,733)

Unallocated items




-

Employee benefits



(35,158)

-

Occupancy



(22,712)

-

Finance



(7,092)

Net Loss before tax from continuing operations



(848,398)




New Zealand

$

Australia

$

Total

$

 

Half-Year Ended 31 December 2015




 

Revenue




 

Interest revenue

-

664

664

 

Other income

1,931

-

1,931

 

Segment revenue

1,931

664

2,595

 





Segment Result




-     Corporate costs

(21,139)

(672,146)

(693,285)

-     Administrative costs

(44,560)

(123,039)

(167,599)

-     Depreciation

(2,184)

(5,601)

(7,785)

-     Exploration expenses

-

(28,823)

(28,823)

-     Foreign exchange gain/(loss)

-

(135,915)

(135,915)

Segment net profit/(loss) before tax

(65,952)

(964,860)

(1,030,812)









 

 

 

 




 





 

10        Segment Information (Continued)

 




 

 

Reconciliation of segment result to net loss before tax




 

Amounts not included in segment result but reviewed by the Board




 

-      Exploration expenditure written off

-

(1,456,942)

(1,456,942)

 

-      Projects abandoned

(855,594)

(305,852)

(1,161,446)

 

Unallocated items




 

-

Employee benefits



(33,381)

 

-

Finance



(433)

 

Net loss before tax from continuing operations



(3,683,014)

 

 

(ii)       Segment assets

 




As at 31 December 2016




Segment assets as at 1 July 2016

7,332,986

3,622,217

10,955,203

Segment asset increases for the year




-

Capitalised Exploration and evaluation

(14,580)

325,422

310,842

-

FX movement Exploration and evaluation

63,938

-

63,938


7,382,344

3,947,639

11,329,983

Reconciliation of segment assets to total assets:




Other assets

415,207

3,044,151

3,459,358

Total assets from continuing operations

7,797,551

6,991,790

14,789,341

 

 

(iii)     Segment liabilities

 




As at 31 December 2016




Segment liabilities as at 1 July 2016

9,155

180,383

189,538

Segment liability increases/(decreases) for the year

(6,096)

57,587

51,491


3,059

237,970

241,029

Reconciliation of segment liabilities to total liabilities:




Other liabilities

-

-

-

Total liabilities from continuing operations

3,059

237,970

241,029

 

11        Expenditure Commitments

 

(a)       Exploration

 

The Company has certain obligations to perform minimum exploration work on Oil and Gas tenements held.  These obligations may vary over time, depending on the Company's exploration programs and priorities.  At 31 December 2016, total exploration expenditure commitments for the next 12 months are as follows:

 

 

 

 

 

 

 

 

Condensed Notes to the Financial Statements

for the Half-Year Ended 31 December 2016

All amounts are Australian Dollars

 

11        Expenditure Commitments (Continued)

 

Entity

Tenement

Consolidated

31 December 2016

Consolidated

     30 June

2016



$

$

Petroleum Creek Limited

PEP 38526

24,045

572,028

Trident Energy Limited

EP 145

200,000

121,500

Oilco Pty Ltd

EPA 155

-

10,000

Oilco Pty Ltd

EP 156

-

155,000

Mosman Oil and Gas (NZ) Ltd

PEP 57067

     312,590

-

Mosman Oil and Gas (NZ) Ltd

PEP 57068

     201,981

1,239,394

Mosman Oil and Gas (NZ) Ltd

PEP 57058

      48,091

-



786,707

2,097,922

 

 

These obligations are subject to variations by farm-out arrangements, sale of the relevant tenements or seeking expenditure exemption for previous year's expenditure. The Company has the option to elect to not carry out the minimum work program commitments pertaining to a specific permit, in which case the Company will relinquish its interest in the relevant permit.

 

(b)       Capital Commitments

 

The Company had no capital commitments at 31 December 2016 (2015 - $Nil).

 

12        Subsequent Events

 

Material transactions arising since 31 December 2016 which will significantly affect the operations of the Company, the results of those operations, or the state affairs of the Company in subsequent financial periods are as follows:

 

13        Dividends

 

No dividends have been paid or proposed during the half year ended 31 December 2016.

 


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