Preliminary Results for Year Ended 31st Dec 2020

RNS Number : 7752A
Petrel Resources PLC
04 June 2021
 

                                                     

 

 

4th June 2021

 

 

Petrel Resources plc

("Petrel" or "the Company")

 

Preliminary Results for the Year Ended 31st December 2020

 

 

 

Petrel announces its results for the year ended 31st December 2020.

 

 

A copy of the Company's Annual Report and Accounts for 2020 will be mailed shortly only to those shareholders who have elected to receive it. Otherwise shareholders will be notified that the Annual Report will be available on the website at www.petrelresources.com Copies of the Annual Report will also be available  for collection from the Company's registered office, 162 Clontarf Road, Dublin 3, Ireland.

 

 

 

The Company's Annual General Meeting will be held on 27th July 2021 in the Hotel Riu Plaza The Gresham, 23 O'Connell Street Upper, Dublin 1, D01 C3W7 at 10.00 am.

 

 

We are closely monitoring the Coronavirus (COVID-19) situation. The Board takes its responsibility to safeguard the health of its shareholders, stakeholders and employees very seriously and so certain measures will be put in place for the AGM in response to the COVID-19 pandemic. Details of these measures will be provided in a letter that will be attached to the Notice of AGM.

 

 

E NDS

 

 

 

 

For further information please visit http://www.petrelresources.com/   or contact:

 

Enquiries:

 

Petrel Resources

 

John Teeling, Chairman

+353 (0) 1 833 2833

David Horgan, Director

 

 

 

Nominated Adviser and Broker

 

Beaumont Cornish - Nominated Adviser 
Roland Cornish

Felicity Geidt

 


+44 (0) 020 7628 3396

Novum Securities Limited - Broker 
Colin Rowbury

 

+44 (0) 20 399 9400

 

 

 

Blytheweigh - PR
Megan Ray
Madeleine Gordon-Foxwell

+44 (0) 207 138 3206

+44 (0) 207 138 3553

+44 (0) 207 138 3208

 

 

Teneo

Luke Hogg

Alan Tyrrell

Ciara Wylie

 

+353 (0) 1 661 4055

+353 (0) 1 661 4055

+353 (0) 1 661 4055

 

 

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). The person who arranged for the release of this announcement on behalf of the Company was Jim Finn, Director.

 

 

Statement Accompanying the Preliminary Results

 

 

It's very difficult to write a chairman's report fifteen months into an effective world lockdown of exploration activities. International travel has ceased, obtaining visas is difficult as embassies are not staffed, attempts to gain meetings with authorities are stymied as officials work remotely. Nevertheless work goes on and deals are worked out over zoom calls.

 

The stalemate continues over the ownership of 32 million Petrel shares. These shares are subject to a high court injunction on their sale. Despite numerous and ongoing discussions with the original buyers of the shares no progress has been made. The original buyers, a French based group very experienced in resources, are either unwilling or unable to clarify ownership and to give the undertaking necessary to lift the injunction. The company is committed to and actively involved in attempting to find a solution. Proposals to date lack clarity on title and funding and do not address the ownership of 32 million shares.

 

Petrel has ongoing interest in Iraq and Ghana. The Irish offshore exploration ground was dropped in the face of an offshore oil exploration ban on all new licences and in the event of a discovery on existing licences, the likelihood of years of opposition to any development. Ireland is now a no-go area for native fossil fuel development, instead relying on imported oil, gas and electricity. Within a few years our only indigenous gas supplier, the Corrib feed will be depleted, so we will be 100% dependent on supplies of gas from Russia, though UK interconnectors, and electricity from France, most likely generated by nuclear power.

 

Renewables are the future but they are years if not decades away from being able to supply consistent, stable, cost effective power to boil a kettle, drive a car or run a manufacturing operation.  Those of us active in the natural resources sector in Ireland have failed to persuade politicians and the media of the inherent dangers to supply. I hope I am wrong.

 

Meanwhile Petrel continues to push its interest in Iraq and Ghana. For the foreseeable future oil will play a major part in world economic development. Iraq has some of the best oil deposits in the world. In a stable era Iraqi oil production would be 2 or 3 times the current under 4 million barrels a day. For more than 20 years Petrel has been in Iraq. Activities have languished in year past but the addition of an Iraqi director, Riadh Mahomud Hameed and the contact of French investors led to a re-opening of contacts. It has been, and remains a difficult and dangerous place to explore. Led by Riadh we are putting exploration proposals to the authorities. We are particularly keen to revisit the Merjan field where we earlier produced development proposals.

 

Ghana, where Petrel holds a 30% interest (Clontarf 60%, local interest 10%) in offshore block Tano 2A continues to frustrate. Covid has played a significant role in recent delays. Meetings expected to take place in Europe in spring 2020 were cancelled and have not yet been reinstated. This 12 year saga shows no sign of being finalised.

 

Future

 

While we continue to engage with the French group and respect and admire their experience and contacts, we have to move on. Our focus in the immediate future will be Iraq.

 

At the same time we will open discussions with groups in other jurisdictions who might see Petrel as a way to monetise their oil and gas assets.

 

 

 

 

 

John Teeling

Chairman

3rd June 2021

 

PETREL RESOURCES PLC

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

 

 

 

 

2020

2019

 

 

 

 

Administrative expenses

(399,133)

(345,508)

 

 

 

Impairment of exploration and evaluation assets

(51,552)

(1,613,591)

 

 

   

OPERATING LOSS

(450,685)

(1,959,099)

 

 

 

 

 

   

LOSS BEFORE TAXATION

(450,685)

(1,959,099)

 

 

 

Income tax expense

-

-

LOSS FOR THE FINANCIAL YEAR: all attributable

 

 

to equity holders of the parent

(450,685)

(1,959,099)

 

 

 

Other comprehensive income

-

-

 

 

 

Items that are or may be reclassified

 

 

subsequently to profit or loss

-

-

 

 

 

Exchange differences

-

(119,048)

 

 

 

TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR

(450,685)

(2,078,147)

 

 

 

 

 

 

Loss per share - basic and diluted

(0.29c)

(1.50c)

 

 

 

 

 

 

PETREL RESOURCES PLC

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020

 

 

 

 

2020

2019

 

Assets

 

 

 

 

 

Non-Current Assets

 

 

 

 

 

Intangible assets

931,967

983,969

 

 

 

 

931,967

983,969

 

 

 

 

 

 

Current Assets

 

 

 

 

 

Trade and other receivables

34,994

38,036

Cash and cash equivalents

333,900

367,777

 

 

 

 

368,894

405,813

 

 

 

Current Liabilities

 

 

 

 

 

Trade and other payables

(710,541)

(629,885)

 

 

 

Net Current Liabilities

(341,647)

(224,072)

 

 

 

NET ASSETS

590,320

759,897

 

 

 

 

 

 

Equity

 

 

 

 

 

Called-up share capital

1,962,981

1,866,827

Capital conversion reserve fund

7,694

7,694

Capital redemption reserve

209,342

209,342

Share premium

21,786,011

21,601,057

Share based payment reserve

26,871

26,871

Translation reserve

-

376,154

Retained deficit

(23,402,579)

(23,328,048)

 

 

 

TOTAL EQUITY

590,320

759,897

 

 

 

 

 

 

PETREL RESOURCES PLC

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

 

 

 

Share

Capital

Share

Premium

Capital

Redemption

Reserve

 

Capital

Conversion

Reserve

fund

Share

Based

Payment

Reserve

Translation

Reserve

Retained

Deficit

Total

At 31 December 2018

1,306,966

21,601,057

209,342

7,694

26,871

495,202

(21,368,949)

2,278,183

Shares issued

559,861

-

-

-

-

-

-

559,861

Total comprehensive income for the financial year

-

-

-

-

-

(119,048)

(1,959,099)

(2,078,147)

At 31 December 2019

1,866,827

21,601,057

209,342

7,694

26,871

376,154

(23,328,048)

759,897

Shares issued

96,154

184,954

-

-

-

-

-

281,108

Total comprehensive income for the financial year

-

-

-

-

-

-

(450,685)

(450,685)

Transfer of reserves

 

 

 

 

 

(376,154)

376.154

-

At 31 December 2020

1,962,981

21,786,011

209,342

7,694

26,871

-

(23,402,579)

590,320

 

Share premium

Share premium reserve comprises of a premium arising on the issue of shares. Share issue expenses are expensed through the statement of comprehensive income when incurred.

 

Capital redemption reserve

On 25 July 2018 the shareholders approved the buy back and cancellation of 16,747,368 shares for nominal consideration from Amira Petroleum N.V., Amira International Holdings Limited and their advisors.  These shares were immediately cancelled upon their repurchase and the nominal value of these shares were transferred into the capital redemption reserve.

 

Capital conversion reserve fund

The ordinary shares of the company were renominalised from €0.0126774 each to €0.0125 each in 2001 and the amount by which the issued share capital of the company was reduced was transferred to the capital conversion reserve fund.

 

Share based payment reserve

The share based payment reserve arises on the grant of share options under the share option plan.

 

Translation Reserve

The translation reserve arises from the translation of foreign operations. A transfer from the translation reserve to retained deficit occurred during the year as a result of the impairment of the related intangible assets.

 

Retained deficit

Retained deficit comprises of losses incurred in the current and prior years.

 

PETREL RESOURCES PLC

 

CONSOLIDATED CASH FLOW STATEMENT

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

 

 

 

 

2020

2019

 

CASH FLOW FROM OPERATING ACTIVITIES

 

 

 

 

 

Loss for the financial year

(450,685)

(1,959,099)

Impairment charge 

51,552

1,613,591

Foreign exchange

4,623

-

 

 

 

OPERATING CASHFLOW BEFORE

 

 

MOVEMENTS IN WORKING CAPITAL

(394,510)

(345,508)

 

 

 

Movements in working capital:

 

 

Increase/(Decrease) in trade and other payables 

80,656

(47,730)

Decrease in trade and other receivables 

3,042

19,980

 

 

 

CASH USED IN OPERATIONS

(310,812)

(373,258)

 

 

 

 

 

 

NET CASH USED IN OPERATING ACTIVITIES

(310,812)

(373,258)

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

Receipts/(Payments) for exploration and evaluation assets

450

(150,870)

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

450

(150,870)

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

Shares issued

281,108

559,861

 

 

 

NET CASH GENERATED FROM FINANCING ACTIVITIES

281,108

559,861

 

 

 

 

 

 

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS

(29,254)

35,733

 

 

 

Cash and cash equivalents at beginning of financial year

367,777

329,503

 

 

 

Effect of exchange rate changes on cash held in

 

 

foreign currencies

(4,623)

2,541

 

 

 

Cash and cash equivalents at end of financial year

333,900

367,777

 

 

 

 

 

1.  ACCOUNTING POLICIES

 

There were no changes in accounting policies from those used to prepare the Group's Annual Report for financial year ended 31 December 2019.  The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

 

 

2.  LOSS PER SHARE

 

 

2020

2019

 

 

 

 

Loss per share - basic and diluted

(0.29c)

(1.50c)

 

 

 

 

Basic loss per share

 

The earnings and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:

 

 

2020

2019

 

 

 

 

Loss for the financial year attributable to equity holders

(450,685)

(1,959,099)

 

 

 

 

 

 

 

2020

2019

 

Number

Number

Weighted average number of ordinary shares for the

 

 

purpose of basic earnings per share

153,961,544

130,647,568

 

 

 

 

Basic and diluted loss per share are the same as the effect of the outstanding share options is anti-dilutive.

 

 

3.  GOING CONCERN

 

The Group incurred a loss for the financial year of €450,685 (2019: loss of €1,959,099) and had net current liabilities of €341,647 (2019: €224,072) and a retained earnings deficit of €23,402,579 (2019 deficit of €23,328,048) at the balance sheet date. These conditions as well as those noted below, represent a material uncertainty that may cast significant doubt on the Group and Company's ability to continue as a going concern.

 

Included in current liabilities is an amount of €677,531 (2019: €587,531) owed to key management personnel in respect of remuneration due at the balance sheet date. Key management have confirmed that they will not seek settlement of these amounts in cash for a period of at least one year after the date of approval of the financial statements or until the Group has generated sufficient funds from its operations after paying its third party creditors.

 

The Group and Company had a cash balance of €333,900 (2019: €367,777) at the balance sheet date.  The directors have prepared cashflow projections for a period of at least twelve months from the date of approval of these financial statements which indicate that additional finance may be required to fund working capital requirements and develop existing projects. The cashflow projections include any anticipated impacts of the Covid-19 pandemic on the Group and Company. As the Group is not revenue or cash generating it relies on raising capital from the public market. The Group completed capital raisings during the year.

 

As in previous years the Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements and believe the going concern basis is appropriate for these financial statements. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

 

 

4.  INTANGIBLE ASSETS

 

Exploration and evaluation assets:

2020

2019

 

Cost:

 

 

Opening balance

983,969

2,523,279

Additions

-

195,870

Disposals

(450)

-

Exchange translation adjustment

-

(121,589)

Impairment

(51,552)

(1,613,591)

 

 

 

Closing balance

931,967

983,969

 

 

 

 

 

Segmental Analysis

2020

2019

 

Ghana

931,967

931,967

Ireland

-

52,002

Iraq

-

-

 

 

 

 

931,967

983,969

 

 

 

 

 

Exploration and evaluation assets relate to expenditure incurred in exploration in Ireland and Ghana. The directors are aware that by its nature there is an inherent uncertainty in Exploration and evaluation assets and therefore inherent uncertainty in relation to the carrying value of capitalized exploration and evaluation assets.

 

Due to legislative uncertainty since 2017, exacerbated by the Taoiseach's public statements in September 2019 against the issue of new Atlantic oil exploration licenses, Petrel has discontinued farm-out discussions with a gas super-major.  Also, the board reluctantly dropped our 100% owned and operated Frontier Exploration License (FEL) 3/14, despite multiple identified targets. Similarly, the board decided not to apply to convert our prospective Licensing Option (LO) 16/24 into a Frontier Exploration License. Accordingly, the directors have impaired in full all expenditure relating to the above mentioned licenses, resulting in an impairment charge of €51,552 in the current year and €1,613,591 in the prior year. 

 

During 2018 the Group resolved the outstanding issues with the Ghana National Petroleum Company (GNPC) regarding a contract for the development of the Tano 2A Block. The Group has signed a Petroleum Agreement in relation to the block and this agreement awaits ratification by the Ghanian government. 

 

Relating to the remaining exploration and evaluation assets at the financial year end, the directors believe there were no facts or circumstances indicating that the carrying value of the intangible assets may exceed their recoverable amount and thus no impairment review was deemed necessary by the directors. The realisation of these intangible assets is dependent on the successful discovery and development of economic reserves and is subject to a number of significant potential risks, as set out below:

 

· Licence obligations;

· Funding requirements;

· Political and legal risks, including title to licence, profit sharing and taxation;

· Exchange note risk;

· Political risk;

· Financial risk management; and

· Geological and development risks.

 

Directors' remuneration of €Nil (2019: €30,000) and salaries of €Nil (2019: €15,000) were capitalised as exploration and evaluation expenditure during the financial year.

 

 

5.  SHARE CAPITAL

 

 

2020

2019

 

Authorised:

 

 

800,000,000 ordinary shares of €0.0125

10,000,000

10,000,000

 

 

 

 

 

 

 

Allotted, called-up and fully paid:

 

 

 

 

Number

Share

Share

 

 

 Capital

 Premium

 

 

 

 

 

 

At 1 January 2019

104,557,246

1,306,966

21,601,057

Issued during the financial year

44,788,913

559,861

-

 

   

   

   

At 31 December 2019

149,346,159

1,866,827

21,601,057

 

   

   

   

 

 

 

 

At 1 January 2020

149,346,159

1,866,827

21,601,057

Issued during the financial year

7,692,308

96,154

184,954

 

   

   

   

At 31 December 2020

157,038,467

1,962,981

21,786,011

 

   

   

   

 

 

Movements in share capital

 

On 30 July 2019 a total of 44,788,913 shares were placed at a price of 1.25 cents per share. Proceeds were used to provide additional working capital and fund development costs.

 

On 26 May 2020 a total of 7,692,308 shares were placed at a price of 3.25 pence per share. Proceeds were used to provide additional working capital and fund development costs.

 

 

6.  POST BALANCE SHEET EVENTS

 

There were no material post balance sheet events affecting the Company or Group.

 

7.  ANNUAL GENERAL MEETING

 

The Company's Annual General Meeting will be held on 27th July 2021 in the Hotel Riu Plaza The Gresham, 23 O'Connell Street Upper, Dublin 1, D01 C3W7 at 10.00 am.

 

 

8.  GENERAL INFORMATION

 

The financial information set out above does not constitute the Company's financial statements for the year ended 31 December 2020.  The financial information for 2019 is derived from the financial statements for 2019 which have been delivered to the Companies Registration Office.  The auditors have reported on 2019 statements; their report was unqualified with an emphasis of matter in respect of considering the adequacy of the disclosures made in the financial statements concerning the valuation of intangible assets, investment in subsidiaries and amounts due by group undertakings. The financial statements for 2020 will be delivered to the Companies Registration Office.

 

 

A copy of the Company's Annual Report and Accounts for 2020 will be mailed shortly only to those shareholders who have elected to receive it. Otherwise shareholders will be notified that the Annual Report will be available on the website at www.petrelresources.comCopies of the Annual Report will also be available for collection from the Company's registered office, 162 Clontarf Road, Dublin 3, Ireland.

 

 

 

 

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