TIDMTOM
RNS Number : 3690Q
TomCo Energy PLC
28 June 2022
28 June 2022
TomCo Energy plc
("TomCo", the "Company" or the "Group")
Unaudited interim results for the six-month period ended 31
March 2022
TomCo Energy plc (AIM: TOM), the US operating oil development
group focused on using innovative technology to unlock
unconventional hydrocarbon resources, announces its unaudited
interim results for the six-month period ended 31 March 2022 (the
"Period").
Highlights
-- Acquisition of an initial 10% interest in Tar Sands Holdings II LLC (" TSHII")
-- TSHII reserves report received from Netherland, Sewell & Associates, Inc.
-- A number of agreements entered into with certain third
parties to seek to enhance the potential value that can be
generated from the TSHII site and provide income for the
Company
-- Placing completed in January 2022, raising gross proceeds of
GBP1.25 million, to fund the drilling of three exploration wells
and cover corporate expenses, particularly in relation to
Greenfield Energy LLC's shorter-term plans
-- Drilling of three exploration wells on the TSHII site
completed post the Period end with initial results meeting the
Company's expectations
-- Appointment of Zac Phillips as a Non-Executive Director of
the Company, with Richard Horsman stepping down from the Board
Chairman's Statement
Operational
I am very pleased with the progress made during the Period as
the Company's primary focus remains on its wholly owned subsidiary,
Greenfield Energy LLC ("Greenfield") and its near-term potential
production plans at the Tar Sands Holdings II LLC ("TSHII") site in
the Uinta Basin, Utah, United States. As announced on 9 June 2021,
TomCo, via Greenfield, entered into an agreement to acquire up to
100% of the ownership and membership rights and interests in TSHII
(the "Membership Interests").
On 16 November 2021, we were pleased to report that Greenfield
had exercised its option to acquire an initial 10% of the
Membership Interests for a total cash consideration of US$2
million, of which US$500,000 was satisfied by crediting the
deposits paid previously. Following this acquisition, Greenfield
retains an exclusive option, at its sole discretion, to acquire the
remaining 90% of the Membership Interests for certain additional
cash consideration up to 31 December 2022, as detailed in the
Company's announcement of 9 June 2021.
Alongside the acquisition of the initial 10% of the Membership
Interests, a newly incorporated subsidiary of Greenfield was
granted a lease over approximately 320 acres of the 760-acre site
owned by TSHII (the "Lease Area"), for a nominal consideration and
annual rental of US$320, together with a 12% net sales royalty per
barrel of conventional oil and gas produced and removed from the
Lease Area. The lease provides Greenfield's subsidiary with the
exclusive right to explore, drill, and mine for, and extract,
store, and remove oil, gas, hydrocarbons, and other associated
substances on and from the Lease Area. In addition, it affords the
right, inter alia, to erect, construct and use such plant and
equipment and infrastructure as required. The lease is for an
initial term of 10 years and will continue thereafter for so long
as any oil, gas or other hydrocarbons are being produced from the
Lease Area or drilling operations are being prosecuted or as the
parties may agree.
The US$1.5 million balance of the consideration for the initial
10% of the Membership Interests paid by Greenfield, was financed by
way of an unsecured US$1.5 million loan from Valkor Oil & Gas
LLC ("Valkor") to Greenfield (the "Loan"). Such Loan is repayable
by Greenfield via a number of potential means and although
originally scheduled to be repaid on or before 30 May 2022, the
repayment date has subsequently been extended to on or before 31
July 2022.
Greenfield is engaged in ongoing discussions regarding possible
funding options, including a due diligence exercise with a
potential funder, to potentially achieve the ultimate acquisition
of 100% of the Membership Interests, as well as the drilling of
several production oil wells and the planned first 5,000 barrels of
oil per day production plant, whilst progressing other preparatory
work. However, there can be no certainty that Greenfield can secure
the requisite funding or the permitting required for such
wells.
TSHII Reserves Report
On 13 January 2022, we were pleased to announce the findings of
an independent report commissioned from Netherland, Sewell &
Associates, Inc. ("NSAI") estimating the proved (1P), proved plus
probable (2P), and proved plus probable plus possible (3P) oil
reserves, associated marketable sand volumes, and future net
revenue, as of 31 December 2021 in respect of a 100 per cent.
interest in a potential commercial scale project situated on the
mining properties comprising the TSHII site.
NSAI estimated 1P oil reserves of 22.8 million barrels of oil
("bbls"), 2P oil reserves of 33.6 million bbls and 3P oil reserves
of 44.3 million bbls. NSAI further estimated associated volumes of
marketable sand at 22.8 million tonnes (1P), 41.2 million tonnes
(2P) and 59.8 million tonnes (3P). Total estimated undiscounted
future net revenues (as outlined in the Company's announcement of
13 January 2022) ranged from US$942 million based on 1P reserves,
to approximately US$2.5 billion based on 3P reserves in respect of
a gross 100% interest in TSHII. Estimated discounted future net
revenues attributable to TomCo's current 10 per cent. interest in
TSHII ranged from approximately US$30.5 million based on 1P
reserves, to approximately US$57.6 million based on 3P
reserves.
TSHII Drilling
During the Period, Greenfield's wholly owned subsidiary, AC Oil
LLC, secured the permits required from the Utah Division of Oil,
Gas and Mining to drill three exploration wells on the TSHII site
and post the Period end on 31 May 2022, we reported that the
drilling of these three exploration wells had been completed.
Initial results met with the Company's expectations and the full
results of this drill programme are currently being independently
assessed by NSAI with a view to updating its initial TSHII reserves
report in the coming months.
Additionally, Greenfield continues to progress the requisite
permitting for its planned production well programme on the TSHII
site following recent changes to the relevant permit legislation.
The Company currently anticipates that the necessary permits will
be secured in time for drilling to commence in Q3 2022, assuming
the requisite funding has been obtained beforehand, with initial
production expected to occur in Q4 2022. The number of wells to be
permitted has been increased from an initially planned five to
seven.
Third Party Agreements in relation to TSHII site
Alongside the TSHII exploration well drill programme and ongoing
funding discussions, Greenfield and TSHII entered into several
agreements with certain third parties during the Period, designed
to enhance the potential value that can be generated from the TSHII
site and provide income for the Company.
TSHII entered into a 10-year lease with a tenant starting from 1
March 2022, covering an existing refinery on the TSHII site that is
not required for Greenfield's future plans and was previously
scheduled to be demolished should Greenfield eventually acquire
100% of TSHII. The tenant intends to develop a 10,000 barrels of
oil per day refinery on the site and under the terms of the lease
has two years in which to do so without potentially forfeiting the
lease. The lease requires the tenant to pay TSHII US$10,000 per
month by way of rent, together with a further payment of US$3 for
every barrel of produced hydrocarbons.
Vivakor Inc ("Vivakor") entered into a renewed lease with TSHII
covering approximately three acres of land for a term of five
years, with an option to extend for a further five years, effective
from 9 March 2022, to, inter alia, accommodate Vivakor's storage
needs and planned plant operations at the TSHII site. It is
Vivakor's intention, with the assistance of Greenfield, to develop
and enhance a pre-existing oil sands processing plant on the leased
land. Such an upgraded plant, to be operated by Vivakor, would be
designed to produce at least 1,000 barrels of oil per day or
equivalent tonnage of asphalt cement. Under the lease agreement,
TSHII shall supply Vivakor with such quantity of oil sands as
Vivakor determines each month, at a set minimum saturation quality,
with a maximum supply of 2,000 tons per day. Vivakor will cover the
cost of mining the oil sands and will pay TSHII US$3 per ton of oil
sands processed by way of rental for the Lease. Vivakor paid a
US$30,000 advance against future rental payments on signing of the
Lease.
Additionally, Greenfield entered into a Memorandum of
Understanding ("MoU") with Vivakor covering a proposed professional
services agreement for the potential supply of certain operating
and engineering services, including sand treatment and oil
upscaling to Vivakor. In exchange for its services in respect of
the enhancement of Vivakor's plant, Greenfield would be entitled to
receive 50% of the net revenues received by Vivakor for any
post-processed sand material from the plant sold through offtake
agreements procured by Greenfield. The MoU includes a binding
five-year exclusivity period for agreeing and entering into any
definitive agreements.
Greenfield also entered into an agreement with Heavy Sweet Oil
LLC ("Heavy Sweet Oil"), a US based oil and gas company, to assist
it with permitting and government relations in respect of their
planned drilling programme adjacent to the D Tract of the TSHII
site. Should Heavy Sweet Oil progress to producing oil it is
anticipated that some of the supporting infrastructure for their
operations would be located on the TSHII site. Such assistance is
being provided alongside Greenfield's own work to progress its
plans for the TSHII site. Heavy Sweet Oil are paying TomCo
US$10,000 per month for its services, with the agreement backdated
to start from 1 January 2022.
TurboShale
In January 2022, the Company acquired the residual 20% interest
in TurboShale Inc ("TurboShale") not previously held by the
Company, for US$15,000. Accordingly, TurboShale is now a wholly
owned subsidiary of the Company. Amongst other assets, TurboShale
owns two 25KW Radio Frequency generators currently valued by TomCo
at over US$500,000 and which could be utilised on the TSHII site.
However, the Company continues to evaluate its future strategy for
TurboShale, which is not currently a strategic priority for the
Company.
Board Changes
On 24 January 2022, Zac Phillips was appointed as a
Non-Executive Director of the Company. Zac had previously been, and
continues to be, engaged by TomCo, through his company, Oil &
Gas Advisors Limited, to provide advice in respect of a number of
financing initiatives.
Zac has over 22 years' experience in the oil and gas sector, and
of finance, working for companies such as BP, Chevron, DB
Petroleum, Merrill Lynch and ING Barings, where he undertook
finance or finance related roles. He is an expert in the valuation
of oil and gas exploration and production assets at all stages of
the cycle. Previously, Zac was the CFO for Dubai World's oil &
gas business (DB Petroleum), with responsibility for risk
management, valuation and authoring of investment proposals. Zac
has an Honours Degree in Chemical Engineering and a PhD in Chemical
Engineering. He is a member of the Society of Petroleum Engineers,
Institute of Chemical Engineers, American Association of Petroleum
Geologists and the Association of International Petroleum
Negotiators.
At the same time, Richard Horsman resigned as a Non-Executive
Director of the Company in order to focus on his other business
interests. I would like to thank Richard for his contribution to
the Company and we wish him well in his future endeavours.
Funding
On 24 January 2022, the Company raised gross proceeds of GBP1.25
million via the placing of 250,000,000 new ordinary shares at 0.50
pence per share (the "Placing"). The Placing was undertaken to,
inter alia, provide funds to further progress Greenfield's
shorter-term plans in relation to the TSHII site. The net proceeds
of the Placing are currently expected to provide sufficient funding
to cover the Company's corporate operating expenses through to Q1
2023, and satisfied the costs associated with drilling the
abovementioned three exploration wells on the TSHII site.
The net proceeds are also being utilised to cover the Company's
expenses in relation to an ongoing due diligence exercise in order
to secure potential funding of up to US$145 million for Greenfield.
Whilst there is no certainty that such funding arrangements will be
satisfactorily concluded, or as to the terms of any such funding,
such non-equity financing, if secured, would enable Greenfield to
acquire the remaining 90% of the Membership Interests in TSHII and
cover the currently estimated construction costs of an initial
5,000 barrels per day oil production plant and the requisite
associated supporting infrastructure to enable the future mining of
oil baring sands at the TSHII site.
Additionally, on 23 November 2021 the Company received
GBP210,000 through the exercise of broker warrants to subscribe for
46,666,666 new ordinary shares at a price of 0.45 pence per share.
This related to warrants issued as part of the Company's placing,
announced on 16 November 2020.
Summary
Our continued focus is on progressing our plans for Greenfield
and unlocking the significant potential we see in the TSHII
site.
Greenfield is engaged in ongoing discussions regarding possible
funding options to potentially achieve the ultimate acquisition of
100% of the TSHII Membership Interests, as well as the proposed
drilling of a number of production oil wells and future
construction of the planned first 5,000 barrels of oil per day
production plant, whilst progressing other preparatory work. Whilst
there can be no certainty that Greenfield can secure the requisite
funding or the further permitting required for such wells, I am
optimistic, based on discussions with potential funders to date,
that the required funding to implement our plans can be secured in
due course.
These continue to be very exciting times for TomCo as we look to
realise Greenfield's significant long term potential.
Malcolm Groat
Non-Executive Chairman
Enquiries :
TomCo Energy plc
Malcolm Groat (Chairman) / John Potter (CEO) +44 (0)20 3823 3635
Strand Hanson Limited (Nominated Adviser)
James Harris / Matthew Chandler +44 (0)20 7409 3494
Novum Securities Limited (Broker)
Jon Belliss / Colin Rowbury +44 (0)20 7399 9402
IFC Advisory Limited (Financial PR)
Tim Metcalfe / Florence Chandler +44 (0)20 3934 6630
For further information, please visit www.tomcoenergy.com .
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended.
Condensed consolidated statement of comprehensive income
For the six-month period ended 31 March 2022
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 30 September
31 March 31 March
2022 2021 2021
Notes GBP'000 GBP'000 GBP'000
----------------------------------------- ----- ----------- ----------- -------------
Revenue 23 - -
----------------------------------------- ----- ----------- ----------- -------------
Cost of sales - - -
----------------------------------------- ----- ----------- ----------- -------------
Gross profit/(loss) 23 - -
Administrative expenses 3 (637) (738) (1,528)
Impairment losses - - (8,679)
----------------------------------------- ----- ----------- ----------- -------------
Operating loss (614) (738) (10,207)
Finance income/(costs) (64) - -
Share of loss of joint venture - (39) (84)
----------------------------------------- ----- ----------- ----------- -------------
Loss on ordinary activities before
taxation (678) (777) (10,291)
Taxation - - -
----------------------------------------- ----- ----------- ----------- -------------
Loss from continuing operations (678) (777) (10,291)
Loss for the period/year attributable
to :
Equity shareholders of the parent (678) (739) (10,017)
Non-controlling interests - (38) (274)
----------------------------------------- ----- ----------- ----------- -------------
(678) (777) (10,291)
----------------------------------------- ----- ----------- ----------- -------------
Items that may be reclassified subsequently to
profit or loss
Exchange differences on translation
of foreign operations
Other comprehensive income for the year attributable
to:
Equity shareholders of the parent (1) (598) (507)
Non-controlling interests (11) 13 4
Other comprehensive income (12) (585) (503)
Total comprehensive loss attributable
to :
Equity shareholders of the parent (679) (1,337) (10,524)
Non-controlling interests (11) (25) (270)
----------------------------------------- ----- ----------- ----------- -------------
(690) (1,362) (10,794)
----------------------------------------- ----- ----------- ----------- -------------
Loss per share attributable to the equity shareholders
of the parent
------------------------------------------------------------- ----------- -------------
Basic & Diluted Loss per share (pence) 4 (0.04) (0.06) (0.76)
----------------------------------------- ----- ----------- ----------- -------------
Condensed consolidated statement of financial position
As at 31 March 2022
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 March 31 March 30 September
2022 2021 2021
Note GBP'000 GBP'000 GBP'000
----------------------------------- ---- ----------- ------------ ---------------
Assets
Non-current assets
Intangible assets 5 3.989 8,192 3,947
Property, plant and equipment - 382 -
Investment in joint venture - 1,859 -
Financial assets 6 1,523 - -
Other receivables 26 24 25
----------------------------------- ---- ----------- ------------ ---------------
5,538 10,457 3,972
----------------------------------- ---- ----------- ------------ ---------------
Current assets
Trade and other receivables 115 138 104
Other financial assets 6 - - 371
Cash and cash equivalents 1,124 2,250 726
----------------------------------- ---- ----------- ------------ ---------------
1,239 2,388 1,201
----------------------------------- ---- ----------- ------------ ---------------
Total Assets 6,777 12,845 5,173
----------------------------------- ---- ----------- ------------ ---------------
Liabilities
Current liabilities
Loans (1,208) - -
Trade and other payables (384) (228) (808)
(1,592) (228) (808)
----------------------------------- ---- ----------- ------------ ---------------
Net current (liabilities)/assets (353) 2,160 393
----------------------------------- ---- ----------- ------------ ---------------
Total liabilities (1,592) (228) (808)
----------------------------------- ---- ----------- ------------ ---------------
Total Net Assets 5,185 12,617 4,365
----------------------------------- ---- ----------- ------------ ---------------
Shareholders' equity
Share capital - - -
Share premium 32,527 30,271 31,142
Warrant reserve 8 2,145 3,466 2,579
Translation reserve (231) (316) (225)
Retained deficit (29,256) (20,606) (28,688)
----------------------------------- ---- ----------- ------------ ---------------
Equity attributable to owners
of the parent 5,185 12,815 4,808
Non-controlling interests - (198) (443)
----------------------------------- ---- ----------- ------------ ---------------
Total Equity 5,185 12,617 4,365
----------------------------------- ---- ----------- ------------ ---------------
The above financial information was approved and authorised for
issue by the Board of Directors on 27 June 2022 and was signed on
its behalf by:
J Potter
Director
Condensed consolidated statement of changes in equity
For the six months ended 31 March 2022
Share Share Warrant Translation Retained Non-controlling Total
capital premium reserve reserve deficit Total interest equity
----------------------- -----
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ----- -------- -------- -------- ----------- -------- ------- --------------- -------
At 30 September
2020 (audited) - 29,222 1,288 282 (19,887) 10,905 (173) 10,732
-------- -------- -------- ----------- -------- ------- --------------- -------
Loss for the period - - - - (739) (739) (38) (777)
Comprehensive income
for the period - - - (598) - (598) 13 (585)
------------------------------ -------- -------- -------- ----------- -------- ------- --------------- -------
Total comprehensive
loss for the period - - - (598) (739) (1,337) (25) (1,362)
Issue of shares
(net of costs) - 1,049 2,178 - - 3,227 - 3,227
Share based payment
charge - - - 20 20 - 20
------------------------------ -------- -------- -------- ----------- -------- ------- --------------- -------
At 31 March 2021
(unaudited) - 30,271 3,466 (316) (20,606) 12,815 (198) 12,617
------------------------------ -------- -------- -------- ----------- -------- ------- --------------- -------
Loss for the period - - - - (9,278) (9,278) (236) (9,514)
Comprehensive income
for the period - - - 91 - 91 (9) 82
------------------------------ -------- -------- -------- ----------- -------- ------- --------------- -------
Total comprehensive
income for the perio (9,278
d - - - 91 ) (9,187) (245) (9,432)
Issue of shares
(net of costs) - 871 (872) - - (1) - (1)
Expiry of warrants - - (15) - 15 - - -
Share based payment
charge - - - - 1,181 1,181 - 1,181
At 30 September
2021 (audited) - 31,142 2,579 (225) (28,688) 4,808 (443) 4,365
------------------------------ -------- -------- -------- ----------- -------- ------- --------------- -------
Loss for the period - - - - (678) (678) - (678)
Comprehensive loss
for the period - - - (1) - (1) (11) (12)
------------------------------ -------- -------- -------- ----------- -------- ------- --------------- -------
Total comprehensive
loss for the period - - - (1) (678) (679) (11) (690)
Issue of shares
(net of costs) - 1,385 - - - 1,385 - 1,385
Purchase of non-controlling
interest - - - (5) (460) (465) 454 (11)
Exercise of warrants - - (140) - 140 - - -
Expiry of warrants - - (294) - 294 - - -
Share-based payment
charge - - - - 136 136 - 136
------------------------------ -------- -------- -------- ----------- -------- ------- --------------- -------
At 31 March 2022
(unaudited) - 32,527 2,145 (231) (29,256) 5,185 - 5,185
------------------------------ -------- -------- -------- ----------- -------- ------- --------------- -------
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share capital Amount subscribed for share capital at nominal value,
together with transfers to share premium upon redenomination
of the shares to nil par value.
Share premium Amount subscribed for share capital in excess of nominal
value, together with transfers from share capital
upon redenomination of the shares to nil par value.
Warrant reserve Amounts credited to equity in respect of warrants
to acquire ordinary shares in the Company.
Translation reserve Amounts debited or credited to equity arising from
translating the results of subsidiary entities whose
functional currency is not sterling.
Retained deficit Cumulative net gains and losses recognised in the
consolidated statement of comprehensive income.
Non-Controlling Amounts attributable to the non-controlling interest
Interests in TurboShale Inc.
Condensed consolidated statement of cash flows
For the period ended 31 March 2022
Unaudited Unaudited Audited
Six months Six months Year ended
ended 31 ended 31 30 September
March 2022 March 2021 2021
Note GBP'000 GBP'000 GBP'000
------------------------------------------- ---- ----------- ------------------ -------------
Cash flows from operating activities
Loss after tax (678) (777) (10,291)
Finance costs 64 - -
Amortisation of intangible fixed
assets - 3 6
Impairment losses - - 8,679
Share-based payment charge 136 20 135
Unrealised foreign exchange (gains)/
losses (121) 172 67
Share of loss of joint venture - 39 84
(Increase)/decrease in trade and
other receivables (11) (20) 22
(Decrease)/increase in trade and
other payables 49 13 63
------------------------------------------- ---- ----------- ------------------ -------------
Cash used in operations (561) (550) (1,235)
Interest received/(paid) - - -
Net cash outflows from operating
activities (561) (550) (1,235)
Cash flows from investing activities
Investment in intangibles 5 (411) - (2)
Purchase of financial assets 6 (1,115) - (219)
Investment in joint venture - (761) (1,502)
Purchase of non-controlling interest (11) - -
Cash acquired on acquisition of
control of joint venture - - 124
Net cash used in investing activities (1,537) (761) (1,599)
------------------------------------------- ---- ----------- ------------------ -------------
Cash flows from financing activities
Issue of share capital 1,460 3,500 3,500
Costs of share issue (75) (273) (274)
Receipt of loans 1,111 - -
Net cash generated from financing
activities 2,496 3,227 3,226
------------------------------------------- ---- ----------- ------------------ -------------
Net increase in cash and cash
equivalents 398 1,916 392
Cash and cash equivalents at beginning
of financial period 726 334 334
------------------------------------------- ---- ----------- ------------------ -------------
Foreign currency translation differences - - -
------------------------------------------- ---- ----------- ------------------ -------------
Cash and cash equivalents at end
of financial period 1,124 2,250 726
------------------------------------------- ---- ----------- ------------------ -------------
UNAUDITED NOTES FORMING PART OF THE CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
For the six months ended 31 March 2022
1. Accounting Policies
Basis of Preparation
The unaudited condensed consolidated interim financial
statements of TomCo Energy plc ("TomCo" or the "Company") for the
six months ended 31 March 2022, comprise the Company and its
subsidiaries (together referred to as the "Group").
The unaudited condensed interim financial information for the
Group has been prepared using the recognition and measurement
requirements of International Financial Reporting Standards (IFRS
and IFRIC interpretations) issued by the International Accounting
Standards Board ("IASB") as adopted for use in the EU, with the
exception of IAS 34 Interim Financial Reporting that is not
mandatory for companies quoted on the AIM market of the London
Stock Exchange. The unaudited condensed interim financial
information has been prepared using the accounting policies which
will be applied in the Group's statutory financial information for
the year ending 30 September 2022.
There were no new standards, interpretations and amendments to
published standards effective in the period which had a significant
impact on the Group.
Going concern
As at 27June 2022, the Group had cash reserves of approximately
GBP610k, and an outstanding loan due to Valkor of approximately
GBP1.23 million (US$1.5 million) principal amount.
The Directors have prepared a Group cash flow forecast for the
period to 30 June 2023. The forecast, which includes committed
capital expenditure as at the date of this interim report,
indicates that the Group will need to raise additional finance in
order to continue as a going concern. The cash flow forecast
assumes, amongst other things, the following:
-- that either the Valkor Loan of US$1.5 million, which is due
for repayment by 31 July 2022, is further extended by mutual
agreement, which would lead to an increase in financing costs, or
is alternatively settled by the grant of a production share over
the production wells planned to be drilled on leased land now
occupied by the Group under arrangements concluded during the
reporting period; and
-- that the potential payment, which is due in respect of the
TSHII option, if exercised, by 31 December 2022 of US$16,250,000
requires sufficient additional funding to be raised prior to
December 2022 otherwise the option will lapse. Should the option
lapse because sufficient funding cannot be secured then the Group's
current business plan would be curtailed but, in the Board's view,
the Group would remain a going concern subject to the occurrence of
any other currently unforeseen events.
It is possible that rather than further extend the term or grant
a production share, the Group may wish to refinance the Valkor Loan
and that additional capital expenditure beyond that committed as at
the date of this interim report will be necessary prior to February
2023 in order to maximise the opportunities presented by, in
particular, Greenfield. Any such refinancing or additional
expenditure would be subject to funding, in whole or in part, via
additional debt or equity or a combination of both.
The Directors note that in light of both the lingering effects
of COVID-19 and the ongoing war in Ukraine there remains
considerable uncertainty concerning the global economy and that oil
prices continue to be volatile, albeit reaching higher levels of
late, which may have implications in respect of securing additional
funding when required, either for the Group's day-to-day operations
or possible additional capital expenditure.
The cash reserves currently held by the Group are insufficient
to fund ongoing overhead costs for the entire forecast period to 30
June 2023. However, based on a history of successfully raising
funds, the Directors have a reasonable expectation that the Group
can raise additional funds, when necessary, albeit there is no
guarantee that adequate funds will be available at that time.
All of these conditions represent a material uncertainty which
may cast significant doubt over the Group's ability to continue as
a going concern and, therefore, that it may be unable to realise
its assets and discharge its liabilities in the normal course of
business. Whilst acknowledging this material uncertainty, the
Directors remain confident of raising additional funds when
required and therefore the Directors consider it appropriate to
prepare the unaudited condensed consolidated interim financial
statements on a going concern basis. The unaudited condensed
consolidated interim financial statements do not include the
adjustments that would result if the Group was unable to continue
as a going concern.
2. Financial reporting period
The unaudited condensed interim financial information
incorporates comparative figures for the unaudited six-month
interim period to 31 March 2021, and the audited financial year
ended 30 September 2021. The six-month financial information to 31
March 2022 is neither audited nor reviewed. The Directors consider
the unaudited condensed interim financial information for the
period to be a fair representation of the financial position,
results from operations and cash flows for the period in conformity
with the generally accepted accounting principles consistently
applied.
The financial information contained in this unaudited interim
report does not constitute statutory accounts as defined by the
Isle of Man Companies Act 2006. It does not include all disclosures
that would otherwise be required in a complete set of financial
statements and should be read in conjunction with the 2021 Annual
Report and Financial Statements. The comparatives for the full year
ended 30 September 2021 are not the Group's full statutory accounts
for that year. The auditors' report on those accounts was
unqualified.
3. Operating Loss
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2022 2021 2021
GBP'000 GBP'000 GBP'000
------------------------------------------------ ----------- ----------- -------------
The following items have been charged in arriving at operating loss:
Directors' remuneration 234 160 271
Share-based payment charges 136 20 132
Auditors' remuneration 22 16 43
Operating leases for land and buildings-short
term assets 12 4 10
------------------------------------------------ ----------- ----------- -------------
4. Loss per share
Basic loss per share is calculated by dividing the losses
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period concerned.
Reconciliations of the losses and weighted average number of shares
used in the calculations are set out below.
Weighted average Per share
Losses number of shares amount
Six months ended 31 March 2022 GBP'000 Pence
---------------------------------------- --------- ------------------ ----------
Basic and Diluted EPS
Losses attributable to ordinary
shareholders on continuing operations (678) 1,573,769,286 (0.04)
---------------------------------------- --------- ------------------ ----------
Weighted average Per share
Losses number of shares amount
Six months ended 31 March 2021 GBP'000 Pence
---------------------------------------- --------- ------------------ ----------
Basic and Diluted EPS
Losses attributable to ordinary
shareholders on continuing operations (739) 1,193,585,125 (0.06)
---------------------------------------- --------- ------------------ ----------
Weighted average Per share
Losses number of shares amount
Year ended 30 September 2021 GBP'000 Pence
---------------------------------------- --------- ------------------ ----------
Basic and Diluted EPS
Losses attributable to ordinary
shareholders on continuing operations (10,017) 1,323,206,884 (0.76)
---------------------------------------- --------- ------------------ ----------
5. Intangible assets
Oil & Gas Exploration Oil & Gas Oil &Gas
and development Patents and Development
licences patent applications expenditure Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------------------- -------------------- ------------ ---------
Cost, net of impairment and amortisation
At 30 September 2020 (audited) 8,819 15 - 8,834
Additions - - - -
Translation differences
and amortisation (638) (4) - (642)
--------------------------------- --------------------- -------------------- ------------ ---------
At 31 March 2021 (unaudited) 8,181 11 - 8,192
Additions 2 - - 2
Acquisition of subsidiary - - 3,875 3,875
Impairment (8,287) (6) - (8,293)
Translation differences
and amortisation 104 (5) 72 171
--------------------------------- --------------------- -------------------- ------------ ---------
At 30 September 2021 (audited) - - 3,947 3,947
Additions 139 - 272 411
Adjustment to previously
recognised asset - - (482) (482)
Translation differences
and amortisation 3 - 110 113
--------------------------------- --------------------- -------------------- ------------ ---------
At 31 March 2022 (unaudited) 142 - 3,847 3,989
--------------------------------- --------------------- -------------------- ------------ ---------
Net book value
At 31 March 2022 (unaudited) 142 - 3,847 3,989
--------------------------------- --------------------- -------------------- ------------ ---------
At 30 September 2021 (audited) - - 3,947 3,947
--------------------------------- --------------------- -------------------- ------------ ---------
At 31 March 2021 (unaudited) 8,181 11 - 8,192
--------------------------------- --------------------- -------------------- ------------ ---------
A newly formed wholly owned subsidiary of Greenfield, AC Oil
LLC, has entered into a 10-year lease from 15 November 2021 to
explore for oil, gas, hydrocarbons and all associated substances
over a 320-acre site in Uinta County, Utah, USA owned by Tar Sands
Holdings II LLC.
The directors have reassessed the value of intangibles and
liabilities owned and owed by Greenfield at acquisition during the
year ended 30 September 2021 and have reduced the value of both by
GBP482,000.
6. Financial asset
GBP'000
----------------------------------------- ------------------
At 31 March 2021 -
On acquisition of subsidiary 146
Additions 219
Other comprehensive income-translation
differences 6
------------------------------------------- ------------------
At 30 September 2021 (audited) 371
Additions 1,115
Other comprehensive income-translation
differences 37
------------------------------------------- ------------------
At 31 March 2022 1,523
------------------------------------------- ------------------
In November 2021, Greenfield completed the purchase of a 10%
ownership interest in Tar Sands Holdings II LLC ("TSHII"). The
investment is carried at cost. The Group has an option to purchase
the remaining 90% interest in TSHII by 31 December 2022 for
US$16.25 million. The option is recorded at its cost of nil on the
basis that there is no reliable fair value for this instrument.
7. Share Capital
31 March 31 March 30 September
2022 2021 2021
unaudited Unaudited audited
Number of Number of Number of
shares shares shares
--------------------------- -------------- -------------- --------------
Issued and fully paid
Number of ordinary shares
of no-par value 1,748,078,678 1,451,412,012 1,451,412,012
--------------------------- -------------- -------------- --------------
8. Warrants
31 March 31 March 30 September
2022 2021 2021
unaudited Unaudited Audited
--------------------------- ------------- -------------- -------------
Outstanding (number) 5 84,552,350 1,041,457,112 704,575,640
Exercisable (number) 5 84,552,350 1,041,457,112 704,575,640
Weighted average exercise
price (pence) 0. 9 1.0 0.9
--------------------------- ------------- -------------- -------------
9. Post balance sheet events
On 31 May 2022, the Company announced that the terms of the
unsecured US$1.5 million Loan obtained by Greenfield from Valkor in
connection with its acquisition of the initial 10% of the
Membership Interests in TSHII had been varied in order to extend
the repayment date to on or before 30 June 2022.
In addition, further to the Company's announcements of 10
February and 10 March 2022, on the same date the Company reported
that the drilling of the three exploration wells on the TSHII site
has been completed with initial results meeting with the Company's
expectations. The results of the drill programme were being
assessed by NSAI with a view to it providing an update to its
initial TSHII reserves report, as announced by the Company on 13
January 2022, in the coming months.
Additionally, Greenfield was progressing the requisite
permitting for its planned production well programme on the TSHII
site following recent changes to the relevant permit legislation.
The Company anticipated that the necessary permits will be secured
in time for drilling of the wells to commence in Q3 2022, assuming
the requisite funding has been secured, with initial production
then expected in Q4 2022. The number of wells to be permitted had
been increased from five to seven.
On 28 June 2022, the Company announced that the terms of the
abovementioned Loan from Valkor had been further varied in order to
extend the repayment date to on or before 31 July 2022.
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END
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