Half Year Results

RNS Number : 8739W
Mosman Oil and Gas Limited
28 April 2021
 


 

28 April 2021

Mosman Oil and Gas Limited

 ("Mosman" or the "Company")

 

Half Year Results

 

Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company, announces its Half Year results to 31 December 2020.

 

Summary

·     With a clear focus on the higher margin operations, Mosman took the decision to sell the Welch project and shares in Norseman.

·     Proceeds applied to drilling, completing, and installing production facilities at Falcon and workovers at Stanley and Greater Stanley.

· COVID-19 constraints and some production challenges resulted in lower production, which was also impacted by a volatile oil price further affecting revenue

· Revenue of AUD380,000 and Gross Profit AUD56,828

· Net loss of AUD0.7m impacted by production challenges and the volatile oil price in 2020

· Gross Project Production 34,569 BOE 1

· Net Production to Mosman 9,871 BOE 1

1 BOE/boe - barrels of oil equivalent

2 Gross Project Production - means the production of BOE at a total project level (100% basis) before royalties (where Mosman is the Operator) and where Mosman is not the operator the total gross production for the project

3 Net Production - Net to Mosman's Working interest after royalties

 

Post period events

· Sold remaining shares in Norseman Silver Inc for AUD208,000

· Completed the sales of the Welch asset for AUD546,611

· Raised £1.5m to be used for Helium, Hydrogen and Hydrocarbon exploration on EP 145 in Central Australia

· Acquired an additional 20% of the Greater Stanley (Duff lease), increasing Mosman's working interest in Duff to 40%.

 

John W Barr, Chairman of Mosman commented: " Whilst the first half of FY21 was extremely challenging with continued economic uncertainty, volatile oil price movements and production challenges, we remained resolute that we would weather the storm.  We have started Q3 with renewed vigour having completed the disposal of the Welch project to enable us to focus on drilling activity and are look forward to the opportunity our increased working interest in Greater Stanley in the US will bring.

 

"We are well funded to deliver our exploration and development plan and expect to benefit from the recovery in energy prices.  This coupled with the planned exploration at EP145 in Australia, where drilling results in nearby permits have demonstrated the commercial production of hydrocarbons reinforcing the potential for successful helium and hydrogen exploration, sets out an encouraging programme for the months ahead. 

 

"Once again, we thank our shareholders for their support whilst reassuring them of our continued confidence to achieve growth in both production and value for the business." 

 

Enquiries:

 

Mosman Oil & Gas Limited

John W Barr, Executive Chairman

Andy Carroll, Technical Director

jwbarr@mosmanoilandgas.com

acarroll@mosmanoilandgas.com

 

NOMAD and Joint Broker

SP Angel Corporate Finance LLP

Stuart Gledhill / Richard Hail / Adam Cowl

+44 (0) 20 3470 0470

 

Alma PR

Justine James

+44 (0) 20 3405 0205

+44 (0) 7525 324431

mosman@almapr.co.uk

Joint Broker

Monecor (London) Ltd

trading as ETX Capital

Thomas Smith

+44 (0) 20 7392 1432

 

 

 

Updates on the Company's activities are regularly posted on its website: www.mosmanoilandgas.com  

 

 

Operations Review

 

Strategy

 

Mosman's objective remains to identify opportunities which will provide operating cash flow and have further development upside, in conjunction with adding value to the Company's existing exploration permits. To that end the Company is effectively operating in two divisions with onshore oil and gas production with further potential growth in the USA, and exploration for oil, gas, helium and hydrogen in Central Australia.

 

Whilst the strategy remains intact, short term adjustments were necessary as a result of global events, oil price movements and the COVID19 pandemic that has affected the world. The Board took action to ensure the company survived, and we are pleased that it has not only survived but is well placed for the economic recovery.

 

With lower oil prices, the decision was made to focus on the higher margin USA operations in East Texas and to dispose of other projects where possible. This led to the sale of the Welch project and sale of the shares in other companies. Proceeds were subsequently applied to drilling, completing, and installing production facilities at Falcon and workovers at Stanley and Greater Stanley.

 

In Central Australia, the original plan was to progress exploration by conducting seismic acquisition. As a result of COVID19, approvals for on ground activity were delayed. An airborne gravity survey is now planned to obtain geophysical data over the whole permit, while approval is sought for the seismic acquisition. Those activities are now fully funded with an equity placing announced in March 2021.

 

Results

 

The unaudited results for the six months to 31 December 2020 reflect the seriousness of the economic uncertainty in the second half of 2020 coupled with production issues, particularly at Stanley, where a number of workovers have been completed. Revenue fell to $383,138 and Gross Profit decreased to $56,828. 

 

On top of the fall in production, oil prices ranged between US$39 in July 2020 to US$48 in December 2020. This has recently risen to over US$60. These prices were better than the first half of the 2020 calendar year, but did effect the gross revenue. Arkoma was again disappointing and the Company is still reviewing options for this non-core asset. Falcon Production began in December 2020, although sales and the recognition of revenue did not commence until January 2021.

 

Expenses increased slightly during the period due to the appointment of a second broker, increased amortisation costs and currency movements.

 

The pandemic has restricted travel by the Board since early 2020 and thus the Company has become increasingly dependent on consultants at operational levels. The Company is effectively operating in two Countries, and clear divisions of duties have been implemented.

 

Operationally a number of activities occurred with the drilling of Falcon-1, the drilling of Stanley-4, the sale of Welch, and various workovers. From a corporate perspective there was strong activity with a number of presentations, a capital raising, and the sale of shares in Canada.

 

The ability to raise funds on the capital markets was important with over $1.6 million spent on exploration, development, and acquisitions during the six months. The Company raised GBP0.9m gross before expenses in an equity placing during the period in October 2020 and, in a post balance sheet date event, it raised a further GBP1.5 million gross before expenses in March 2021.

 

Today, the Company is well funded with a cash balance of AUD3.5 million as at the end of March 2021 and has an aggressive exploration and development plan on its existing projects for the remainder of 2021 that are expected to benefit from the recovery in energy prices and the economy while continuing to evaluate new acquisition opportunities that fit its investment criteria.

 

 

 

Projects

 

Mosman has Working Interests in onshore producing projects located in the USA. These projects and Mosman's working interests before royalties as at 31 December 2020 are:

 

Producing Projects in USA

 

PRODUCING

Project

Location

Approx Working Interest

(before royalties)

Falcon

Texas

50%

Stanley

Texas

18.5% to 14.85%

Greater Stanley

Texas

40%

Arkoma Stacked Pay

Oklahoma

27% (Held for sale)

 

 

UNDEVELOPED

Project

Location

Approx Working Interest

(before royalties)

Galaxie

Texas

60%

Cinnabar

Texas

85% (after JV farmout)

 

 

Mosman also has interests in two projects in Central Australia:

 

Project

Location

Approx Working Interest

(before royalties)

Amadeus Basin

Northern Territory, Australia

100% (EP145)

 

30% (EPA 155 - 70% was farmed out in 2020

 

 

 

 

Production Summary for the six months ending 31 December 2020

 

Net Production attributable to Mosman for the six months was 9,871 boe.

Production Details

 

Further details are outlined below:

 

 

6 Months to

31 December 2020

6 Months to

31 December 2019

 

Total Project

Net Attributable

Total Project

Net Attributable

 

Gross boe

Net boe

Gross boe

Net boe

Falcon*

2,191

1,096

-

-

Stanley

24,982

3,984

42,268

6,877

Greater Stanley

936

187

-

-

Arkoma

615

123

5,868

1,124

Welch**

5,845

4,481

6,851

5,252

 

Total boe

 

34,569

 

 

  9,871 

 

54,987

 

13,253

 

 

 

Net production means net to Mosman's working interest before royalties

*Falcon production commenced on 11 December 2020

**Welch project has now been sold

 

 

Subsequent Events

 

·In January 2021, the Company announced the sale of the remaining shares it owned in Norseman Silver Inc for AUD208,000;

·The sales of the Welch asset was completed in January 2021 and the amount of AUD546,611 shown as a receivable in the balance sheet of 31 December 2020 was received;

· In February 2021, warrants totalling AUD128,000 were exercised;

·  In March 2021, the Company raised GBP1,500,000 to be used for Helium, Hydrogen and Hydrocarbon exploration on EP 145 in Central Australia;

· In April 2021, the Company announced it had acquired an additional 20% of the Greater Stanley (Duff lease). This increased Mosman's working interest in Duff to 40%.

 

Other than the above, there were no significant events subsequent to the date of statement of financial position.

 

 

 

 

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For The Half Year Ended 31 December 2020

All amounts are in Australian Dollars

 

 

Notes

Consolidated

6 months to

31 December 2020

$

Consolidated

6 months to
  31 December 2019

$

 

 

 

 

Revenue

 

 383,138

998,369

 

Cost of sales

2

 (326,310)

(426,432)

 

Gross profit

 

 56,828

571,937

 

 

 

 

 

 

Interest income

 

  37

23,228

 

Gain on sale of oil and gas assets

 

122,000

-

 

Other income

 

  51,512

39,893

 

 

 

 

 

 

Administrative expenses

 

 (158,325)

(95,766)

 

Corporate expenses

3

 (440,477)

(433,166)

 

Directors fees

 

 (60,000)

(60,000)

 

Exploration expenses incurred not capitalised

 

 (10,090)

-

 

Employee benefits expense

 

 (29,337)

(34,004)

 

Evaluation and due diligence

 

 - 

(140,430)

 

Finance costs

 

 (6,362)

(5,177)

 

Amortisation expense

 

 (63,297)

(43,089)

 

Depreciation expense

 

 (1,559)

(2,208)

 

Impairment expense

 

-

(4,142,016)

 

Loss on foreign exchange

 

(19,846)

-

 

Loss on sale of OCI financial assets

5

(149,906)

-

 

Loss from ordinary activities before income tax expense

 

(708,822)

(4,320,798)

 

Income tax expense

 

-

-

 

Net loss for the period

 

(708,822)

(4,320,798)

 

 

 

 

 

Other comprehensive income

 

 

 

Items that may be reclassified to profit or loss

 

 

 

Gain on financial assets at fair value through other comprehensive income (FVOCI)

4

 525,118

60,626

 

Foreign currency (loss)/gain

4

 (354,035)

(12,023)

 

Other comprehensive income for the period, net of tax

 

171,083

48,603

 

Total comprehensive loss attributable to members of the entity

 

 (537,739)

(4,272,195)

 

 

 

 

 

 

Basic and diluted loss per share

 

(0.04) cents

(0.73) cents

 

      

 

 

The accompanying notes form part of these consolidated financial statements.
 

Condensed Consolidated Statement of Financial Position

As at 31 December 2020

All amounts are in Australian Dollars

 

 

Notes

Consolidated

Balance as at 31 December 2020

Consolidated

Balance as at 30 June  2020

 

 

 

$

$

 

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

 

 776,549

372,479

Trade and other receivables

6

 741,476

78,719

Inventory

 

 - 

44,508

Other financial assets

 

 207,782

93,748

Other assets

7

 81,448

16,959

Total current assets

 

1,807,255

606,413

 

 

 

 

Non-Current Assets

 

 

 

Property, plant & equipment

 

 8,436

9,995

Oil and gas assets

8

 3,083,891

2,061,131

Other receivables

 

  -

54,820

Capitalised oil and gas exploration expenditure

9

383,601

301,242

Total non-current assets

 

3,475,928

2,427,188

 

 

 

 

Total Assets

 

 5,283,183

3,033,601

 

 

 

 

Current Liabilities

 

 

 

Trade and other payables

10

 380,848

358,091

Equity settled liabilities

 

-

191,000

Provisions

 

22,206

20,269

Total current liabilities

 

 403,054

569,360

 

 

 

 

Total Liabilities

 

 403,054

569,360

 

 

 

 

Net Assets

 

 4,880,129

2,464,241

 

 

 

 

Shareholders' Equity

 

 

 

Contributed equity

11 a)

 33,645,124

30,691,497

Reserves

12

883,217

712,134

Accumulated losses

 

 (29,648,212)

(28,939,390)

Equity attributable to shareholders

 

 4,880,129

2,464,241

 

 

 

 

Total Shareholders' Equity

 

4,880,129

2,464,241

 

 

 

 

 

 

The accompanying notes form part of these consolidated financial statements.

 

 

Condensed Consolidated Statement of Changes in Equity

For the Half Year Ended 31 December 2020

All amounts are in Australian Dollars

 

 

Accumulated

Losses

Contributed Equity

Reserves

Non-Controlling Interest

Total

 

$

$

$

$

$

Balance at 1 July 2020

 (28,939,390)

 30,691,497

 712,134

 - 

 2,464,241

Comprehensive income

 

 

 

 

 

Loss for the period

(708,822)

-

-

-

(708,822)

Other comprehensive loss for the period

-

-

171,083

-

171,083

Total comprehensive loss for the period

(708,822)

-

171,083

-

(537,739)

 

 

 

 

 

 

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

New shares issued

-

  3,095,575

-

-

3,095,575

Cost of raising equity

-

  (141,948)

-

-

(141,948)

Total transactions with owners and other transfers

-

2,953,627

-

-

Balance at 31 December 2020

 (29,648,212)

 33,645,124

 883,217

 

  -

 

4,880,129

 

 

 

 

 

 

Balance at 1 July 2019

(24,101,980)

30,164,872

530,837

-

6,593,729

Comprehensive income

 

 

 

 

 

Loss for the period

(4,320,798)

-

-

-

(4,320,798)

Other comprehensive loss for the period

-

-

48,603

-

48,603

Total comprehensive loss for the period

  (4,320,798)

 

  -

  48,603

 

-

 

(4,272,195) 

 

 

 

 

 

 

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

 

New shares issued

-

-

-

-

-

Cost of raising equity

-

-

-

-

-

Total transactions with owners and other transfers

-

-

-

-

-

Balance at 31 December 2019

  (28,422,778)

  30,164,872

 

579,440

 

  -

  2,321,534

 

 

These accompanying notes form part of these consolidated financial statements
 

Condensed Consolidated Statement of Cash Flows

For the Half Year Ended 31 December 2020

All amounts are in Australian Dollars

 

 

 

Consolidated

6 months to  31 December 2020

Consolidated

 6 months to 31 December 2019

 

 

$

$

 

 

 

 

Cash flows from operating activities

 

 

 

Receipts from customers

 

 387,356

 1,010,125

Interest received & other income

 

51,511

-

Payments to suppliers and employees

 

(1,423,368)

 (1,257,973)

Bonds refunded

 

-

 10,000

Interest paid

 

(6,361)

 (5,177)

Net cash used in operating activities

 

 (990,862)

 (243,025)

 

 

 

 

Cash flows from investing activities

 

 

 

Payments for exploration and evaluation

 

  (82,359)

 (15,340)

Deposits paid for acquisition

 

  (135,223)

-

Costs associated with abandoned acquisitions

 

-

-

Payments for oil and gas acquisitions

 

 -

 (162,009)

Payments for oil and gas assets

 

(1,602,290)

 (332,411)

Proceeds from sale of assets

 

261,177

-

Net cash used in investing activities

 

 (1,558,695)

 (509,760)

 

Cash flows from financing activities

 

 

 

Proceeds from shares issued

 

3,095,575

-

Payments for costs of capital

 

(141,948)

-

Payments for loans to third parties

 

-

52,850

Transactions with non-controlling interest

 

-

-

Net cash provided by financial activities

2,953,627

52,850

 

 

 

 

Net decrease in cash and cash equivalents

 

404,070

(699,935)

Cash and cash equivalents at the beginning of the financial period

 

372,479

823,959

Cash and cash equivalents at the end of the financial period

 

 

776,549

 124,024

 

 

The accompanying notes from part of these consolidated financial statements

 

 

 

 

 

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2020

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 Group's 2020 annual financial report for the financial year ended 30 June 2020, 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 (IFRS).

 

Going Concern
The condensed consolidated financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and the discharge of liabilities in the normal course of business.

 

The directors have considered the funding and operational status of the business in arriving at their assessment of going concern and believe that the going concern basis of preparation is appropriate, based upon the following:

 

·Current cash and cash equivalents on hand and a further capital raise of GBP 1,500,000 in March 2021;

·The ability to further vary cash flow depending upon the achievement of certain milestones within the business plan and;

· The ability of the Company to obtain funding through various sources, including debt and equity.

 

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 for which the rights to tenure are current and 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.

 

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.

 

 

 

 

1.  Summary of Significant Accounting Policies (Continued)

 

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; and

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

 

Revenue Reporting

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.

 

The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group's activities as described below. The group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

 

Revenue from joint operations is recognised based on the Group's share of the sale by the joint operation.

 

Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument.

 

Oil and Gas assets

The cost of oil and gas producing assets and capitalised expenditure on oil and gas assets under development are accounted for separately and are stated at cost less accumulated amortisation and impairment losses. Costs include expenditure that is directly attributable to the acquisition or construction of the item as well as past exploration and evaluation costs.

 

When an oil and gas asset commences production, costs carried forward are amortised on a units of production basis over the life of the economically recoverable reserves. Changes in factors such as estimates of economically recoverable reserves that affect amortisation calculations do not give rise to prior financial period adjustments and are dealt with on a prospective basis.

 

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.

 

New standards and interpretations

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Standards Board ('AASB') that are mandatory for the current reporting period.

 

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

 

 

 

 

 

 

 

 

Consolidated

6 months to 31 December 2020

Consolidated

  6 months to 31 December 2019

 

$

$

2.  Cost of sales

 

Cost of sales

70,571

165,843

Lease operating expenses

255,739

260,589

 

326,310

426,432


3.  Corporate costs

 

Accounting, Company Secretary and Audit fees

97,174

96,537

Consulting fees - Board

166,000

161,000

Consulting fees - Other

83,176

82,963

Legal and compliance fees

94,127

92,666

 

440,477

433,166

 

4.  Other comprehensive income

 

 

Gain on financial assets at fair value through other comprehensive income (FVOCI)

 525,118

60,626

Foreign currency (loss)/gain

 (354,035)

(12,023)

 

171,083

48,603

 

5.  Loss on sale of OCI financial assets

 

 

Loss on sale of OCI financial assets

 149,906

-

 

149,906

-

 

The Group sold their remaining shares in Norseman Silver Inc in January 2021. Due to a significant increase in the share price, the $149,906 loss booked on the sale of the OCI financial assets subsequently resulted in a year to date profit of $11,314. The result is that the recorded figures in the 2021 annual report will more than offset the recorded loss in the interim results.

 

 

Consolidated

Balance as at 31 December 2020

Consolidated

  Balance as at 30 June

2020

 

$

$

6.  Trade and other receivables

 

 

Deposits

54,856

-

GST receivable

42,887

20,112

Accrued revenue

94,526

54,235

Settlement funds receivable on sale of asset

546,611

-

Other receivables

2,596

4,372

 

741,476

78,719

The sale of Welch was completed in December 2020 and the balance reflects the amount receivable from the purchaser. The funds were settled in January 2021.

 

     

 

 

 

 

 

Consolidated

Balance as at 31 December 2020

Consolidated

  Balance as at 30 June

2020

 

$

$

    

 

7.  Other assets

 

 

Prepayments

81,448

16,959

 

81,448

16,959

    

 

8.  Oil and gas assets

 

 

Cost brought forward

2,061,131

3,905,106

Acquisition of oil and gas assets during the period

  135,223

236,783

Disposal of oil and gas assets on sale during the period1

(445,606) 

-

Capitalised equipment workovers2

1,602,290

402,901

Amortisation for the year

  (63,297)

(103,616)

Impairment of oil and gas assets

-

(2,380,043)

Impact of foreign exchange

(205,850)

-

Carrying value at end of the period

  3,083,891

2,061,131

 

 

 

1.  Disposal relates to the sale of the Welch project during the period, of which a gain was recorded of $122,000.

2.  Capitalised project drilling and workovers primarily for the Falcon project.

 

 

9.  Capitalised oil and gas expenditure

 

 

Costs brought forward

301,242

1,615,956

Exploration costs incurred during the period

82,359

66,582

Impairment of oil and gas expenditure(i)

-

(1,381,296)

Carrying value at the end of the period

383,601

301,242

(i) Relates to impairment of exploration expenditure in the Amadeus Basin.

 

 

10.  Trade and other payables

 

 

Trade creditors

304,508

331,972

Other creditors and accruals

76,340

26,119

 

380,848

358,091

    
 

 

 

 

11.  Contributed Equity

 

 

Ordinary Shares

 

 

Total shares at 31 December 2020: 2,599,013,052 (30 June 2020: 1,085,810,968) ordinary shares fully paid.

 

 

 

 

 

a) Shares movements during the half-year

Contributed Equity

$

No. of shares

 

Balance at 30 June 2020

30,691,497

1,085,810,968

 

Shares issued

3,095,575

1,513,202,084

 

Cost of issued shares

(141,948)

-

Balance at 31 December 2020

33,645,124

2,599,013,052

 

 

Consolidated

Balance as at 31 December 2020

Consolidated

  Balance as at 30 June

2020

12.  Reserves

 

 

Options reserve

471,818

471,818

Asset revaluation reserve

161,593

(363,525)

Foreign currency translation reserve

249,806

603,841

 

883,217

712,134

 

a) Options Reserve

 

 

 

Options Reserve at the beginning of the period

471,818

471,818

Options Reserve at the end of the period

471,818

471,818

 

 

b) Asset Revaluation Reserve

 

 

 

Asset Revaluation Reserve at the beginning of the period

(363,525)

(402,412)

Revaluation of FVOCI shares

525,118

38,887

Asset Revaluation Reserve at the end of the period

161,593

(363,525)

 

 

c) Foreign Currency Translation Reserve

 

 

 

Foreign Currency Translation Reserve at the beginning of the period

603,841

461,431

Current movement in the period

(354,035)

142,410

Foreign Currency Translation Reserve at the end of the period

249,806

603,841

 

 

 

 

13.  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 the United States. 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, the United States. Unallocated results, assets and liabilities represent corporate amounts that are not core to the reportable segments.

 

(i)  Segment performance

 

 

 

 

 

 

 

United States

$

Australia

$

Total

$

Period ended 31 December 2020

 

 

 

 

Revenue

 

 

 

 

Revenue

 

383,138

-

383,138

Interest income

 

-

37

37

Gain on sale of oil and gas assets

 

122,000

-

122,000

Other income

 

41,512

10,000

51,512

Segment revenue

 

546,650

10,037

556,687

 

 

 

 

 

Segment Result

 

 

 

 

Loss

 

 

 

 

Allocated

 

 

 

 

-  Corporate costs

 

(65,123)

(375,354)

(440,477)

-  Administrative costs

 

  (93,693)

  (64,632)

  (158,325)

-  Lease operating expenses

 

  (255,739)

  - 

  (255,739)

-  Cost of sales

 

  (70,571)

-

  (70,571)

-  Loss on sale of OCI financial assets

 

(149,906)

-

(149,906)

Segment net profit/(loss) before tax

 

(88,382)

(429,949)

(518,331)

 

 

 

 

 

Reconciliation of segment result to net loss before tax

 

 

 

 

 

 

 

 

 

Amounts not included in segment result but reviewed by the Board

 

 

 

 

-  Evaluation expenses incurred not capitalised

 

-

(10,090)

(10,090)

-  Amortisation

 

(63,297)

-

(63,297)

-  Impairment

 

-

-

-

Unallocated items

 

 

 

 

-  Employee benefits expense

 

 

 

(89,337)

-  Finance costs

 

 

 

(6,362)

-  Foreign exchange

 

 

 

(19,846)

-  Depreciation

 

 

 

(1,559)

Net Loss before tax from continuing operations

 

 

 

(708,822)

         

 

 

 

 

 

13.  Segment Information (continued)

 

(i)  Segment performance (continued)

 

 

United States

$

Australia

$

Total

$

 

Period ended 31 December 2019

 

 

 

 

 

Revenue

 

 

 

 

 

Revenue

 

998,369

-

998,369

 

Interest income

 

20,179

3,049

23,228

 

Other income

 

29,811

10,082

39,893

 

Segment revenue

 

1,048,359

13,131

1,061,490

 

 

 

 

 

 

 

Segment Result

 

 

 

 

 

Loss

 

 

 

 

 

Allocated

 

 

 

 

 

-  Corporate costs

 

(99,313)

(333,853)

(433,166)

 

-  Administrative costs

 

(23,020)

(72,746)

(95,766)

 

-  Lease operating expenses

 

(260,589)

-

(260,589)

 

-  Cost of sales

 

(165,843)

-

(165,843)

 

Segment net profit/(loss) before tax

 

499,594

(393,468)

106,126

 

 

 

 

 

 

 

Reconciliation of segment result to net loss before tax

 

 

 

 

 

 

 

 

 

 

 

Amounts not included in segment result but reviewed by the Board

 

 

 

 

 

-  Evaluation and due diligence

 

(47,542)

(92,888)

(140,430)

 

-  Amortisation

 

(43,089)

-

(43,089)

 

-  Impairment

 

(2,760,720)

(1,381,296)

(4,142,016)

 

Unallocated items

 

 

 

 

 

-  Employee benefits expense

 

 

 

(94,004)

 

-  Finance costs

 

 

 

(5,177)

 

-  Depreciation

 

 

 

(2,208)

 

Net Loss before tax from continuing operations

 

 

 

(4,320,798)

 

Period ended 31 December 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13.  Segment Information (continued)

 

 

 

 

(ii)  Segment assets

 

 

 

 

 

 

 

 

United States

$

Australia

$

Total

$

As at 31 December 2020

 

 

 

 

 

Segment assets as at 1 July 2020

 

 

2,350,564

683,037

3,033,601

Segment asset balances at end of

period

 

 

 

 

 

-  Exploration and evaluation

 

 

-

7,564,519

7,564,519

-  Capitalised Oil and Gas

 

 

4,497,478

-

4,497,478

-  Less: Amortisation

 

 

(71,518)

  - 

(71,518)

-  Less: Impairment

 

 

(1,342,070)

(7,180,918)

(8,522,988)

 

 

 

3,083,890

383,601

3,467,491

 

 

 

 

 

 

Reconciliation of segment assets to total assets:

 

 

 

 

 

Other assets

 

 

648,781

1,166,911

1,815,692

Total assets from continuing operations

 

 

3,732,671

1,550,512

5,283,183

 

 

 

United States

$

Australia

$

Total

$

As at 30 June 2020

 

 

 

 

Segment assets as at 1 July 2019

 

4,618,616

2,571,517

7,190,133

Segment asset balances at end of

year

 

 

 

 

-  Exploration and evaluation

 

-

7,482,160

7,482,160

-  Capitalised oil and gas assets

 

4,632,884

-

4,632,884

-  Less: Amortisation

 

(191,710)

-

(191,710)

-  Less: Expenditure previously capitalized, written off in the year

 

(2,380,043)

(7,180,918)

(9,560,961)

 

 

2,061,131

301,242

2,362,373

 

 

 

 

 

Reconciliation of segment assets to total assets:

 

 

 

 

Other assets

 

289,433

381,795

671,228

Total assets from continuing operations

 

2,350,564

683,037

3,033,601

 

 

 

 

13.  Segment Information (continued)

 

(iii)  Segment liabilities

 

 

 

 

 

 

United States

$

Australia

$

Total

$

As at 31 December 2020

 

 

 

Segment liabilities as at 1 July 2020

 

87,486

481,874

596,360

Segment liability (decreases) for the year

 

(3,069)

(163,237)

(166,306)

 

 

84,417

318,637

403,054

Reconciliation of segment liabilities to total liabilities:

 

 

 

 

Other liabilities

 

-

-

-

Total liabilities from continuing operations

 

84,417

318,637

403,054

 

 

 

 

 

As at 30 June 2020

 

 

 

 

Segment liabilities as at 1 July 2019

 

316,192

280,212

596,404

Segment liability (decreases) for the year

 

(228,706)

201,662

(27,044)

 

 

87,486

481,874

569,360

Reconciliation of segment liabilities to total liabilities:

 

 

 

 

Other liabilities

 

-

-

-

Total liabilities from continuing operations

 

87,486

481,874

569,360

      

 

 

 

 

 

14.   Producing assets

 

The Group currently has 3 producing assets, which the Board monitors as separate items to the geographical and operating

segments. The Stanley and Welch are Oil and Gas producing assets in the United States along with some other projects.

 

Project performance is monitored by the line items below.

 

 

(i)  Project performance

 

 

 

 

 

 

Arkoma

$

Stanley

$

Welch

$

Other Projects

$

Total

$

Half-Year Ended 31 December 2020

 

 

 

 

 

Revenue

 

 

 

 

 

Oil and gas project related revenue

-

 174,245

 203,650

5,243

 383,138

Producing assets revenue

-

174,245

203,650

5,243

383,138

 

 

 

 

 

 

Project-related expenses

 

 

 

 

 

-  Cost of sales

-

10,618

59,953

-

70,571

-  Lease operating expenses

-

26,588

227,974

1,177

255,739

Project cost of sales

-

37,206

287,927

1,177

326,310

 

 

 

Project gross profit

 

 

 

 

 

Gross profit

-

137,039

(84,277)

4,066

56,828

 

 

 

 

 

 

 

 

 

 

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2020

All amounts are Australian Dollars

 

14.  Producing assets (continued)

 

(i)  Project performance

 

 

 

 

 

 

Arkoma

$

Stanley

$

Welch

$

Other Projects

$

Total

$

Half-Year Ended 31 December 2019

 

 

 

 

 

Revenue

 

 

 

 

 

Oil and gas project related revenue

9,564

 365,396

 623,409

-

 998,369

Producing assets revenue

9,564

 365,396

 623,409

-

998,369

 

 

 

 

 

 

Project-related expenses

 

 

 

 

 

-  Cost of sales

880

20,474

144,489

-

165,843

-  Lease operating expenses

10,560

15,401

214,301

20,327

260,589

Project cost of sales

11,440

35,875

358,790

20,327

426,432

 

 

 

Project gross profit

 

 

 

 

 

Gross profit

(1,876)

329,521

264,619

(20,327)

571,937

 

 

 

       
 

 

 

 

 

 

 

 

 

15.  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 2020, the Company has estimated the monetary value of the total exploration commitments for the next 12 months are as follows:

 

Entity

Tenement

$

 

 

 

 

 

Trident Energy Limited1

EP 145

-

 

Oilco Pty Ltd

EPA155

-

 

 

 

-

 

 

1 An extension to the work program condition has been granted until 21 August 2021, when there will be a commitment for completion of 100km of 2D seismic surveys, seismic processing and interpretation and well planning. If the Company has not fulfilled the above obligations, a negotiation with the Northern Territory Department of Primary Industry and Resources may be commenced to extend the period for completion, or the permit relinquished. There can be no certainty that an extension may be granted.

 

(b)  Capital Commitments

 

The Company had no capital commitments at 31 December 2020 (2019 - $Nil).

 

 

16.  Subsequent Events

 

· In January 2021, the Company announced the sale of the remaining shares it owned in Norseman Silver Inc for AUD208,000;

· The sales of the Welch asset was completed in January 2021 and the amount of AUD546,611 previously shown as a receivable was received;

· In February 2021 warrants totalling AUD128,000 were exercised by warrant holders;

· In March 2021 the Company raised GBP1,500,000 to be used for Helium, Hydrogen and Hydrocarbon exploration on EP 145 in Central Australia;

· In April 2021 the Company announced it had acquired an additional 20% of the Greater Stanley (Duff lease). This increases Mosman's working interest in Duff to 40%.

 

Other than the above, there were no significant events subsequent to the date of statement of financial position.

 

17.  Dividends

 

No dividends have been paid or proposed during the half year ended 31 December 2020.

 

 

 

 

 

Directors' Declaration

 

The Directors of the Consolidated Group declare that:

 

1.   The financial statements and notes, as set out on pages 5-20, are in accordance with the Australian Corporations Act 2001:

 

(a)  comply with Accounting Standards, which, as stated in Note 1 - Statement of Accounting Policies to the consolidated financial statements, constitutes compliance with International Financial Reporting Standards (IFRS); and

 

(b)  give a true and fair view of the consolidated financial position as at 31 December 2020 and of the performance for the year ended on that date of the Group.

 

2.   In the Directors' opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

 

This declaration is made in accordance with a resolution of the Board of Directors and is signed by authority for and on behalf of the Directors by:

 

 

 

 

 

John W Barr

Executive Chairman

 

Dated this 27 April 2021

 

 

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