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Petro Matad Ltd (MATD)

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Friday 07 September, 2018

Petro Matad Ltd

Half-year Report

RNS Number : 0584A
Petro Matad Limited
07 September 2018
 

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY PETRO MATAD LIMITED TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Petro Matad Limited

('Petro Matad' or the 'Company')

Interim results for the six months ended 30 June 2018

 

LONDON, 7 September 2018: Petro Matad Limited, the AIM quoted Mongolian oil explorer, is pleased to announce its unaudited interim results for the six months ended 30 June 2018.

 

Financial Summary

 

The Group posted a loss of $6.65 million for the six-month period ended 30 June 2018, which compares to a loss of $2.52 million for the comparable period in 2017. The Company's cash balance at 30 June 2018 was $12.54 million, which compares to a cash balance of $10.92 million on 30 June 2017. The cash position as of 30 June 2018 was substantially increased by the net fund raise of $15.98 million announced on 19 January 2018.

 

The Company's cash position was further enhanced by the net $17.12 million fund raise announced on 13 June 2018. Following approval at the EGM of 3 July 2018, the cash was received on 6 July 2018. As of today, the Company's cash balance plus term deposits stands at $29.73 million, which fully funds planned activities (including drilling of six wells) through to the end of 2019.

 

Operational Update

 

The Snow Leopard 1 exploration well, located in the Taats Basin of Block V, was spudded on 9 July 2018 and drilling operations are ongoing. The prospect has estimated prospective resource potential of 90 million barrels of oil and the Company will announce the well results once drilling and logging is complete, later this month. Once the rig completes operations at the Snow Leopard site it will mobilise to Block IV for drilling of the Wild Horse 1 well some 300 kilometres to the west.

 

As previously disclosed, the Wild Horse 1 well, which is targeting prospective resources of 480 million barrels of oil, has been named by industry specialists Wood Mackenzie as one of the top 20 exploration wells worldwide to watch in 2018. Representatives of the Company's community relations team are in Block IV preparing for the arrival of the rig.

 

Permitting for the drilling location on the Fox prospect in Block V, planned to spud in Q2 2019, is progressing well.

 

The Company's plans for drilling in Block XX in 2018 have experienced some regulatory delays, all of which have now been overcome. However, following extensive negotiations, the Company has been unable to reach agreement with the rig contractor that won the tender due to late stage changes to the contractor's proposed equipment and contracting entity. As a result, the decision has now been taken to postpone Block XX drilling until the start of the 2019 drilling season in Q2 2019.

 

The Company will, over the next few months and through the winter season, re-tender for drilling services. Additionally, the Company will use the time to reprocess existing seismic data over the high-graded Heron and Antelope prospects in the North of Block XX to improve their structural imaging in order to help determine which prospect to target and to optimize the drilling location. Environmental permits covering the entirety of both prospects have already been approved, as is the case for Gazelle.

 

Mike Buck, Chief Executive Officer of Petro Matad said:

 

"Operations at Snow Leopard 1 in Block V are progressing and we look forward to updating the market once the drilling has been completed. Similarly, preparations at Block IV are on track for the Wild Horse 1 well.

 

The delay to Block XX 2018 drilling is disappointing after the extensive efforts the Company has put in to be able to resume operations in the area. However, the delay does offer the chance to exploit logistical, operational and financial synergies to drill the three planned Block XX wells back to back during the 2019 drilling season".

 

Further operational updates will be provided in due course.

 

-Ends -

 

For more information, please contact:

 

Petro Matad Limited   

Mike Buck, CEO            +97 670 141 099 / +97 675 751 099

 

Stockdale Securities Limited (Nominated Adviser and Broker)

Richard Johnson          +44 (0) 20 7601 6100

Andy Crossley

David Coaten  

 

Stifel Nicolaus Europe Limited (Broker)          

Callum Stewart               +44 (0) 20 7710 7600

Nicholas Rhodes

Ashton Clanfield 

 

FTI Consulting (Communications Advisory Firm)

Sara Powell                     +44 (0) 20 3727 1000

Ben Brewerton

All Reserves and Resources definitions and estimates shown in this report are based on the 2007 SPE/AAPG/WPC/SPEE Petroleum Resource Management System ("PRMS").

Technical information in this news release has been reviewed by the Company's Exploration Manager, Mr. Jerry Smart. He has 36 years of industry experience in oil and gas exploration and production with LASMO, Eni, Salamander Energy and Ophir Energy. He holds a B.Sc. in Geology from King's College, London.

Glossary

estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled

 

 

Petro Matad is the parent company of a group focussed on oil exploration, as well as future development and production in Mongolia. At the current time, Petro Matad holds the sole operatorship of three Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 10,343 km² in the far eastern part of the country and Blocks IV and V have an area of 28,999 km2 and 21,150 km2, respectively, in the southwest part of the country.

 

Petro Matad Limited is incorporated in the Isle of Man under company number 1483V. Its registered office is at Victory House, Prospect Hill, Douglas, Isle of Man, IM1 1EQ.

 

 

STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 30 JUNE 2018

 

 

 

 

              Consolidated

 

 

30 Jun 2018

30 Jun 2017

 

 

$'000

$'000

 

 

 

 

Continuing Operations

 

 

 

Revenue

 

 

 

Interest Income

 

180

9

Other Income

 

5

-

 

 

185

9

 

 

 

 

Expenditure

 

 

 

Consultancy fees

 

(63)

(26)

Depreciation and amortisation

 

(144)

(131)

Employee benefits expenses

 

(2,072)

(1,156)

Exploration expenditure

 

(2,870)

(378)

Other expenses

 

(1,690)

(836)

Profit/(Loss) from continuing operations before income tax

 

(6,654)

(2,518)

Income tax expense

 

-

-

Profit/(Loss) from continuing operations after income tax

 

(6,654)

(2,518)

Net Loss

 

(6,654)

(2,518)

 

 

 

 

Other comprehensive income/(loss)

 

 

 

Exchange rate differences on translating foreign operations

 

(30)

44

Other comprehensive income/(loss), net of income tax

 

(30)

44

Total comprehensive loss

 

(6,684

(2,474)

 

 

 

 

Profit/(Loss) attributable to owners of the parent

 

(6,654)

(2,518)

 

 

 

 

Total comprehensive income/(loss) attributable to owners of the parent

 

(6,684)

(2,474)

 

 

 

 

Earnings/(loss) per share (cents per share)

 

 

 

-       Basic and diluted earnings/(loss) per share

 

(1.38)

(0.87)

 

 

 

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2018

 

 

 

                                Consolidated

 

30 Jun 2018

31 Dec 2017

30 Jun 2017

 

$'000

$'000

$'000

ASSETS

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

12,542

5,090

10,924

Trade and other receivables

12

6

168

Prepayments

226

220

166

Financial assets

3,010

3,010

-

Inventory

216

254

306

Total Current Assets

16,006

8,580

11,564

 

 

 

 

Non-Current Assets

 

 

 

Exploration and evaluation

15,275

15,275

15,275

Property, plant and equipment

476

604

720

Total Non-Current assets

15,751

15,879

15,995

TOTAL ASSETS

31,757

24,459

27,559

 

 

 

 

LIABILITIES

 

 

 

Current liabilities

 

 

 

Trade and other payables

939

3,389

1,821

Total Current Liabilities

939

3,389

1,821

TOTAL LIABILITIES

939

3,389

1,821

NET ASSETS

30,818

21,070

25,738

 

 

 

 

EQUITY

 

 

 

Issued capital

126,098

109,769

107,476

Reserves

2,942

2,980

4,176

Accumulated losses

(98,222)

(91,679)

(85,914)

TOTAL EQUITY

30,818

21,070

25,738

 

 

 

 

CONDENSED CASH FLOW STATEMENT

FOR THE HALF-YEAR ENDED 30 JUNE 2018

 

 

Consolidated

 

30 Jun 2018

30 Jun 2017

 

$'000

$'000

 

 

 

Cash flows from operating activities

 

 

Payments to suppliers and employees

(8,510)

(3,041)

Interest received

180

9

Proceeds from Bergen

-

1,200

Farm-out proceeds

-

5,000

Net cash flows from/(used in) operating activities

(8,330)

3,168

 

 

 

Cash flows from operating activities

 

 

Purchase of property, plant and equipment

(42)

(41)

Proceeds from the disposal of plant and equipment

4

-

Net cash flows from/(used in) investing activities

(38)

(41)

 

 

 

Cash flows from financing activities

 

 

Proceeds from issue of shares

15,985

1,921

Capital raising costs

(218)

(647)

Net cash flows from/(used in) financing activities

15,767

1,274

 

 

 

Net increase/(decrease) in cash and cash equivalents

7,399

4,401

Net foreign exchange differences

53

44

Cash and cash equivalents at beginning of period

5,090

6,479

Cash and cash equivalents at end of period

12,542

10,924

 

 

 

 

STATEMENT OF CHANGES IN EQUITY

FOR THE HALF-YEAR ENDED 30 JUNE 2018

 

 

 

Consolidated

 

Attributable to equity holders of the parent

 

 

Issued Capital

$'000

 

Accumulated Losses

$'000

 

Other

Reserves $'000

 

 

Total

$'000

 

 

 

 

 

As at 1 January 2017

106,150

(83,396)

4,109

26,863

Income/(Loss) for the period

-

(2,518)

-

(2,518)

Other comprehensive income

-

-

44

44

Total comprehensive income/(loss) for the period

106,150

(85,914)

4,153

24,389

Transactions with owners in their capacity as owners

 

 

 

 

Issue of share capital

1,921

-

-

1,921

Cost of capital raising

(647)

-

-

(647)

Share based payments

52

-

23

75

As at 30 June 2017

107,476

(85,914)

4,176

25,738

 

 

 

 

 

 

 

 

 

 

As at 1 January 2018

109,769

(91,679)

2,980

21,070

Income/(Loss) for the period

-

(6,654)

-

(6,654)

Other comprehensive income

-

-

(30)

(30)

Total comprehensive income/(loss) for the period

109,769

(98,333)

2,950

14,386

Transactions with owners in their capacity as owners

 

 

 

 

Issue of share capital

16,895

-

-

16,895

Cost of capital raising

(1,081)

-

-

(1,081)

Share based payments

515

111

(8)

618

As at 30 June 2018

126,098

(98,222)

2,942

30,818

 

1.   CORPORATE INFORMATION

 

The financial report covers the consolidated entity of Petro Matad Limited and its controlled entities.

 

Petro Matad Limited, a company incorporated in the Isle of Man on 30 August 2007 has four wholly owned subsidiaries, including Capcorp Mongolia LLC and Petro Matad LLC (both incorporated in Mongolia), Central Asian Petroleum Corporation Limited ("Capcorp") and Petromatad Invest Limited (both incorporated in the Cayman Islands).  Its major shareholder is Petrovis Matad Inc.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The half-year financial report does not include all of the notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

 

The half-year financial report should be read in conjunction with the annual Financial Report of Petro Matad Limited as at 31 December 2017. The half-year consolidated financial statements have been prepared using the same accounting policies as used in the annual financial statements for the year ended 31 December 2017.

 

It is also recommended that the half-year financial report is considered together with any public announcements made by Petro Matad Limited and its controlled entities during the half-year ended 30 June 2018.

 

(a)      Basis of Preparation

 

The half-year consolidated financial report is a general purpose financial report, which has been prepared in accordance with the requirements of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ('IASB'). The half-year financial report has been prepared on a historical cost basis, except where stated.

 

The financial report is presented in US dollars and all values are rounded to the nearest thousand dollars ($'000).

 

For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.

 

(b)      Basis of consolidation

 

The consolidated financial statements comprise the financial statements of the Group as at 31 December each year.

 

Subsidiaries are entities controlled by the Group.  Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.  In assessing control, potential voting rights that presently are exercisable or convertible are taken into account.  The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

 

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

 

A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity transaction.

 

All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full.  Unrealised losses are eliminated unless costs cannot be recovered.

 

 

3.   CONTRIBUTED EQUITY

 

 

                        CONSOLIDATED

 

 

 

30 Jun 2018

  31 Dec 2017

 

 

 

$'000

     $'000

Ordinary shares (i)

525,312,857 shares issued and fully paid

(31 Dec 2017: 333,258,252)

 

126,098

109,769

 

 

 

126,098

109,769

 

                 

 

(i) Ordinary shares

Full paid ordinary shares carry one vote per share and carry the right to dividends.

 

Movement in ordinary shares on issue

Number of Shares

Issue Price$

$'000

At 1 January 2018

333,258,252

 

109,769

Issue of shares through direct subscriptions on 9 Feb 2018

59,167,335

$0.090

5,340

5,340

 

Issue of shares through its broker, Pareto on 9 Feb 2018

19,708,520

$0.090

1,779

Issue of shares through its broker, Stifel on 9 Feb 2018

67,057,398

$0.090

6,052

Issue of shares through its broker, Stockdale on 9 Feb 2018

40,654,376

$0.090

3,669

Issue of shares to employees on 3 Apr 2018 on exercise of awards

2,598,911

$0.010

26

Issue of shares to directors and consultant on 16 Apr 2018 on exercise of awards

2,868,065

$0.010

29

Cost of capital raising

 

 

(1,081)

Share based payment

 

 

515

At 30 June 2017

525,312,857

 

126,098

 

 

 

 

 

 

4.   RESERVES

 

A detailed breakdown of the reserves of the Group is as follows:

 

 

 

Merger reserve

Equity benefits reserve

Foreign currency translation

Total

Consolidated

$'000

$'000

$'000

$'000

 

 

 

 

 

As at 1 July 2017

831

4,446

(1,101)

4,176

Currency translation differences

-

-

(26)

(109)

Share based payments

-

(1,170)

-

124

As at 31 December 2017

831

3,276

(1,127)

2,980

 

 

 

 

 

Currency translation differences

-

-

(30)

(30)

Share based payments

-

(8)

-

(8)

As at 30 June 2018

831

3,268

(1,157)

2,942

 

 

 

 

5.   EARNINGS/(LOSS) PER SHARE

 

The following reflects the income and share data used in the total operations basic and diluted earnings/(loss) per share computations:

 

 

 

CONSOLIDATED

 

30 Jun

2018

30 Jun

2017

Basic earnings/(loss) per share

 

 

Total basic earnings/(loss) per share (US$ cents per share) (note a)

(1.38)

(0.87)

 

 

 

Diluted earnings/(loss) per share

 

 

Total diluted earnings/(loss) per share (US$ cents per share) (note b)

(1.38)

(0.87)

 

 

 

(a)  Basic earnings/(loss) per share

 

 

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

 

 

 

 

 

 

 

 

Net profit/(loss) attributable to ordinary shareholders (US$'000)

(6,654)

(2,518)

 

 

 

Weighted average number of ordinary shares for the purposes of basic earnings per share ('000)

482,124

290,268

 

 

 

(b)  Diluted earnings/(loss) per share

 

 

The profit/(loss) and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows:

 

 

 

 

 

 

 

 

Net profit/(loss) attributable to ordinary shareholders (US$'000)

(6,654)

(2,518)

 

 

 

Weighted average number of ordinary shares for the purposes of basic earnings per share ('000)

482,124

290,268

 

Share Options and Conditional Share Awards could potentially dilute basic loss per share in the future, however they have been excluded from the calculation of diluted loss per share because they are anti-dilutive for both years presented.

 

6.   EVENTS AFTER THE REPORTING DATE

 

On 4 July 2018, the Company issued 1,846,439 shares through direct subscriptions at a price of GBP0.10 per share.

 

On 4 July 2018, the Company concluded a placement by issuing 13,256,520 shares at a price of GBP0.10 per share arranged through its broker, Pareto.

 

On 4 July 2018, the Company concluded a placement by issuing 104,701,135 shares at a price of GBP0.10 per share arranged through its broker, Stifel.

 

On 4 July 2018, the Company concluded a placement by issuing 17,038,798 shares at a price of GBP0.10 per share arranged through its broker, Stockdale.

 

The Company's cash position was further enhanced by the $18.3 million fund raise announced on 13 June 2018.  Following approval at the EGM of 3 July 2018, the cash was received on 6 July 2018.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
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