TIDMDELT
RNS Number : 1247J
Deltic Energy PLC
25 April 2022
25 April 2022
Deltic Energy Plc / Index: AIM / Epic: DELT / Sector: Natural
Resources
Deltic Energy Plc ("Deltic" or "the Company")
Final Results
Deltic Energy Plc, the AIM-quoted natural resources investing
company with a high impact exploration and appraisal portfolio
focused on the Southern and Central North Sea, is pleased to
announce its audited results for the year ended 31 December 2021
('FY 2021').
Highlights
-- Confirmation of Deltic's first exploration well on the Pensacola Prospect (Licence P2252)
-- Well planning rapidly progressing with site survey completed October 2021.
-- Rig selection and contract process is well advanced with
Deltic-Shell JV scheduling drilling the Pensacola well in late Q3
2022.
-- Transformational farm-out deal completed with Capricorn
Energy PLC ("Capricorn") (previously Cairn Energy PLC) to form an
exploration partnership over five licences in the Southern North
Sea gas basin.
-- Introduction of Capricorn has further enhanced Deltic's strong partner base.
-- Capricorn partnership is an endorsement of Deltic's business
model which identifies high quality exploration opportunities and
then attracts high quality exploration partners.
-- The deal will accelerate Deltic's Southern North Sea
exploration programme and see significant investment towards
drilling decisions.
-- Capricorn will fund 100% of the agreed work programme for
each of the five licences up to the point of making a drill or drop
decision on each licence. Capricorn will fund 70% of the costs of
the first well.
-- Deltic received a USD$1m contribution towards historic costs.
Deltic retains a 40% interest in Licences P2428 (Cupertino Area)
and P2567 (Cadence) and a 30% interest in each of Licences P2560,
P2561 and P2562.
-- Strong progress made since farm-out, with the JV aiming to
make a well investment decision in Q3 2022.
-- Acquired approximately 680 km(2) of new 3D seismic data over
the P2428 Licence, which includes the Plymouth prospect.
-- Net cash outflow from operations and investing activity for
the year of GBP1.8 million (2020: GBP1.8 million).
-- Cash position of GBP10.1 million at 31 December 2021 (2020:
GBP12.0 million) with no debt. As at 31 March 2022, the Company had
cash on hand (unaudited) of GBP8.6 million, with GBP0.9m of the
post-year end spending related to progressing Pensacola well
planning.
Graham Swindells, Chief Executive of Deltic Energy,
commented:
"The last year has been a period of considerable achievement and
progress for our company. The completion of a ground-breaking farm
out transaction with Capricorn Energy (formerly Cairn Energy),
covering five gas licences in the Southern North Sea was a major
highlight. As well as broadening our partner base, it serves as a
further endorsement of the quality of our licences, of our
expertise in the gas basin, and of our strategy of identifying
opportunities and attracting high quality partners to support
drilling. We are particularly looking forward to drilling the
Pensacola Prospect in the coming months, as well as continuing our
work with Shell and Capricorn and advancing our other licences in
what should be a very active and exciting period for our
company."
Chairman's Statement
Looking back at my statement of a year ago, with the pandemic
dominating the news, I couldn't have imagined what we are faced
with today, with a global power having launched an attack on a
neighbour in Europe.
As a result, we have learned that there are very real
consequences to relying on natural gas from Russia. Whatever the
outcome of the situation in Ukraine, Europe's position on Russian
gas has undoubtedly changed for the foreseeable future.
At the same time, and partly as a consequence of these events,
we have seen energy prices spiralling upwards. The UK gets a
relatively small portion of its gas from Russia by pipeline and by
Liquified Natural Gas (LNG), brought on ships. However, moves away
from Russian natural gas for our European neighbours causes further
escalation of prices from global producers which then itself leads
to further escalation of the cost of living and household
spending.
With that background, our business is positioned to play its
part in providing these vital natural resources. Contributing to
the essential domestic supply of natural gas from North Sea waters
has always been the very core of our business.
The UK Government is supportive of our sector, sharing our view
that a domestic gas supply is better for energy security, jobs,
Treasury receipts and the environment compared with importing
higher emission supplies. This is apparent in the North Sea
Transition Deal of 2021 and the Energy Security Strategy published
just a few weeks ago.
Direction towards favourable policy has helped our business in
attracting high-quality international joint venture partners, but
the bumps along the road, machinery of policy-making and the
volatility of recent months have undoubtedly impacted the exact
timing of commitment towards operations and contracts.
Our industry continues to face challenges. The challenges change
but they are always there. As a responsible nation, aware of the
potential risks from climate change, we need to use this valuable
resource wisely and deal with the associated greenhouse gas
emissions in order to prevent them from being released into the
atmosphere. Some do not see this as the solution. A popular
narrative is to transition away from oil and gas rather than
continuing to reap its benefits alongside other natural resources
such as wind, solar and nuclear. All predictions from independent
sources such as the Climate Change Committee and United Nations
Climate Panel show oil and gas as part of the future energy mix for
the UK and the world for decades to come.
Deltic Energy is committed to being part of the energy
transition while continuing to explore for natural resources in the
North Sea with a focus on natural gas. Natural gas heats homes,
lights rooms and cooks meals. Fuels such as natural gas are needed
to make cement, steel, glass and bricks; materials that are
integral to our society.
Each member of the Deltic team is proud to play this role.
Our business model is a simple but a highly effective one. We
have developed a conveyor belt of opportunities from picking up
licences in areas where we have demonstrated expertise such as the
Southern North Sea, developing prospects by thorough technical work
and new data acquisition where appropriate, bringing in world-class
operators as partners for exploration well drilling in order to get
these valuable resources to the UK shores. We currently have
acreage at each stage along our conveyor belt up to drilling, and
are preparing to drill our first exploration well at Pensacola with
operator Shell within the coming months. Acreage farmed out to
Shell and Capricorn Energy PLC ("Capricorn") (previously Cairn
Energy PLC) is moving forward along this process to a similar
conclusion and other acreage is being worked towards farm-out.
The Deltic business is in good shape and poised for an exciting
period of exploration in the coming months.
Mark Lappin
Chairman
22 April 2022
Chief Executive's Statement
2021 has been a year of significant achievement and continued
progress. The major highlights for the year have been the positive
well investment decision and firm commitment to drill our Pensacola
Prospect as well as successfully attracting a new high-quality
partner into five of our Southern North Sea gas licences by way of
a wide ranging farm-out. I am particularly excited that as a direct
result of this progress, we are now on the verge of drilling our
first exploration well this year. It has also been a significant
development for Deltic to have broadened its partner base with
another well-established operator who clearly sees the opportunity
that the Southern North Sea presents. As well as providing further
endorsement of our prospects and high quality technical work, the
additional partnership will ensure significant additional
operational activity across our portfolio in the course of the
coming year. Having created a portfolio of highly prospective
opportunities which is now being progressed with multiple partners,
I believe Deltic is in a strong position and geared for exploration
success.
Pensacola
The early part of 2021 was focussed on the completion of the
technical work to support a well investment decision to drill
Pensacola. The outcome of that work was very positive with the
evaluation of the new 3D data acquired resulting in a significant
de-risking of the prospect, with the geological chance of success
increasing from 20% to 55%. The final stage of the technical (and
commercial) work supported the positive decision to commit to a
firm well on Pensacola which will see Deltic drilling its first
well this year.
Following the commitment to drill Pensacola, the focus of
activity moved to well planning which progressed rapidly. The
geophysical site survey over the planned well location was
completed in September and the geotechnical survey, representing
the final phase of the site survey programme, was completed in
October. The surveys, conducted by Fugro GB North Marine Limited,
were completed on time and without incident. The successful
completion of the programme, which is a key part of well planning
and the final phase of offshore activities ahead of drilling,
represented another important milestone in our steady progress
towards drilling the Pensacola prospect.
Preparations for the key catalyst of the drilling of Pensacola
are advancing on a range of fronts as the JV gets closer to the
start of operations. Analysis of site survey data, undertaken as a
standard but important part of the ongoing well planning process,
has identified hard seabed conditions at the well location which
have in part informed Shell's well-advanced rig selection and
contracting process as the JV seeks to ensure straightforward, safe
and efficient operations. This process is being factored into the
planning schedule, with Shell now indicating that drilling is
expected to commence towards the end of Q3 2022.
Pensacola is a Zechstein Reef prospect located to the northwest
of the Breagh gas field in the Southern North Sea. Deltic estimates
the Prospect to contain gross P50 Prospective Resources of 309 BCF
which will rank Pensacola as one of the highest impact exploration
targets to be drilled in the gas basin in recent years. Drilling
success will be transformational both for Deltic and the emerging
Zechstein reef play.
The Pensacola well is also being highly anticipated by the
industry for its potential to unlock a significant new source of
gas to the UK from the Zechstein Reef play, which has been
successfully produced in NW Europe from Poland to The Netherlands.
It also has the potential to demonstrate that the UK still has a
significant level of previously unrecognised exploration upside
which can deliver cost competitive natural gas to UK based
businesses and homes and support the UK's Net Zero targets.
Selene
On the Company's Selene Prospect on Licence P2437, Deltic's
other licence with Shell, the JV has continued to refine its
technical and commercial work to support a well investment
decision, which the Company is continuing to target within the
coming months. Deltic's conviction in Selene has further increased
throughout this process resulting in an uplift in estimated P50
recoverable resources to 318 BCF. With Phase A of the licence due
to conclude in September this year, in line with good licence
management, the JV has taken the prudent step of approaching the
North Sea Transition Authority ('NSTA') to seek an extension to
Phase A. Deltic continues to consider Selene to represent the
largest undrilled structure of its kind in this part of the SNS,
and with an estimated 70% geological chance of success remains
committed to progressing this material prospect to drilling.
Capricorn Energy Farm-in to Licences P2560, P2561, P2562, P2567
and P2428
A key highlight of 2021 was the farm-out of five of our gas
licences in the Southern North Sea to Capricorn which represented a
further endorsement of the quality of the assets that our team has
developed and our gas-focussed exploration strategy, as we continue
to develop our portfolio of opportunities and attract the highest
quality partners.
The farm-out was announced in August and completed in November
2021 with the key terms being as follows:
-- Capricorn acquired a 60% interest in each of Licences P2428
(Cupertino Area) and P2567 (Cadence) and a 70% interest in each of
Licences P2560, P2561 and P2562 which are located between the
Breagh and Tolmount Gas Fields.
-- Deltic received consideration of USD$1 million as a contribution towards historic costs
-- Deltic retained a 40% interest in licences P2428 and P2567
and a 30% interest in licences P2560, P2561 and P2562.
-- Capricorn is funding 100% of an agreed work programme for
each of the five licences up to the point of making a drill or drop
decision on each licence, which includes the acquisition of new
seismic data over Licence P2428 (which was acquired in Autumn
2021).
-- Following a drilling decision being made on either of P2428
and P2567, Capricorn will fund 70% of the costs of whichever well
is drilled first, subject to a gross well cost cap of USD$25
million.
-- Capricorn became Operator of each of the licences.
This transformational and wide-ranging farm-out across multiple
licences and our partnership with Capricorn will see significant
investment being made across Deltic's strategic Southern North Sea
gas exploration portfolio. It has been particularly encouraging to
see the pace at which activity on the licences has already
occurred.
Acquisition of the 3D seismic survey over Licence P2428
commenced in September. Approximately 680km(2) of new data over the
Plymouth Zechstein Reef prospect and surrounding areas was acquired
and completed in November. The data collected is now being
processed with the results expected during the course of May 2022.
The results of this high quality modern 3D seismic survey are
expected to significantly enhance our understanding of the multiple
gas prospects on P2428 and will be key to de-risking future
drilling on this licence as was the case with the Pensacola
Prospect which was derisked following the acquisition of new
seismic. The acquisition and processing of the seismic data already
fulfils the work programme commitments of this licence. The final
processed data will allow Capricorn and Deltic to fast track the
assessment of prospectivity and the JV is now aiming to be in a
position to make a drilling decision by the end of Q3 this
year.
We are particularly excited at the prospect of continuing to
build our partnership with Capricorn, with both parties sharing a
commitment to pursuing high impact exploration opportunities in the
Southern North Sea and successfully developing these gas
prospects.
Central North Sea
The Company holds two licences in the Central North Sea, P2352
(which contains the Dewar prospect) and P2542 (which contains the
Syros prospect).
The Dewar Prospect is a 30th Round licence which, despite
attracting initial farm-out interest, saw the progression of
discussions adversely affected by Covid. However, Dewar remains an
attractive, highly prospective and relatively low risk opportunity
located in close proximity to other fields and existing
infrastructure and one which could be developed very quickly. As
such, Dewar remains an attractive drill-ready prospect with strong
economics. Continued strengthening in the oil price has seen
renewed interest and engagement from interested parties and Deltic
remains committed to seeking a suitable partner to ultimately drill
the prospect, in line with our strategy.
P2542, also located in the Central North Sea, contains the Syros
Prospect and is a more recent licence award. Technical work has
commenced, and the new data having recently been obtained with
initial work looks encouraging. This work will continue with a view
to commencing a farm-out process in due course.
Board appointment
In November, I was delighted to welcome Peter Nicol to the Board
of Deltic. Peter has outstanding experience in the energy sector
both in industry and in senior investment banking positions. Peter
has worked with several listed oil and gas companies and is
currently an independent non-executive director of a number of
exploration focussed companies. We are already benefitting from
Peter's wealth of energy sector, financial, city and public company
experience which will be invaluable to Deltic as we continue to
build our business.
Outlook
As I write, recent events mean that energy security has never
felt more important. Soaring energy prices with its impact on
energy intensive industry and households alike has acutely
highlighted the consequences of having domestic production. UK
domestic production does not come close to meeting even half of
national demand. There is heavy dependence on imports from foreign
countries, including Russia. The effect of this reliance is
compounded when considering the significantly higher emissions
associated with gas imported in the form of LNG. It is abundantly
clear that a secure supply of domestically produced oil and gas is
much better for jobs, the UK economy and, importantly, the
environment. Accordingly, it is imperative that the UK continues to
encourage further exploration. The UK still has a significant level
of previously unrecognised exploration upside which we know can
deliver cost competitive and low carbon intensity natural gas to
UK-based businesses and homes while at the same time supporting the
UK's Net Zero targets.
The UK oil and gas industry has a vital role to play in the
energy transition. Deltic is fully supportive of 'net zero'
ambitions and, with a largely gas dominated portfolio, we believe
we have the potential and ability to contribute to this transition.
Indeed, we are confident that all of our Southern North Sea gas
prospects have the potential to be developed in a manner which is
entirely consistent with Net Zero goals.
Deltic welcomes the UK Government's Energy Security Strategy
announced earlier this month. In addition to committing to maximise
North Sea production, it confirmed that a new North Sea licensing
round will be brought forward and launched in the Autumn. Previous
licensing rounds have been a key source of success and growth of
Deltic's portfolio in recent years, and as such we are particularly
encouraged by this development. Accordingly, Deltic is already
commencing its plans to invest in applications both individually
and in partnership as we look to continue to expand the Company's
conveyor belt of drilling opportunities.
The progress made throughout 2021 has created the foundation for
what has the potential to be a very exciting year ahead. We will
shortly be drilling our first well with Shell on the Pensacola
Prospect with success being potentially transformational for our
company. At the same time, we expect to significantly progress the
five licences we now have in partnership with Capricorn. We should
see the results of the newly acquired and processed 3D seismic data
over Licence P2428 before the end of Q2 which will enable the JV to
fast-track an assessment of prospectivity in this area and support
a well investment decision later in the year. We will also continue
to progress our 100% owned licences in the Central North Sea with a
view to farm-out and drilling and look forward to the launch of the
UK's 33(rd) Licensing Round in the Autumn.
With our conveyor belt of opportunities, high quality partners,
and activity, we anticipate a potentially transformational year as
we continue to strive to create value for our shareholders.
Graham Swindells
Chief Executive Officer
22 April 2022
Operational Review
Introduction
Significant progress has been made across the portfolio during
the reporting period with key highlights being confirmation of
exploration drilling on the Pensacola prospect in March 2021 and
securing a successful outcome to the farm-out process on Licence
P2428 which ultimately resulted in Capricorn committing to a
significant work programme investment across a total of five of
Deltic's Southern North Sea licences as announced on the 12th
August 2021.
P2252 - Pensacola (30% Deltic)
On 29 March 2021, the Shell-Deltic JV confirmed its intention to
drill the Pensacola exploration well. Preparatory works are well
advanced: the site survey works completed in October 2021, long
lead items have been ordered and environmental permitting for the
drilling activities are underway.
Preparations for the key catalyst of the drilling of Pensacola
are advancing on a range of fronts as the JV gets closer to the
start of operations. Analysis of site survey data, undertaken as a
standard but important part of the ongoing well planning process,
has identified hard seabed conditions at the well location which
have in part informed Shell's well-advanced rig selection and
contracting process as the JV seeks to ensure straightforward, safe
and efficient operations. This process is being factored into the
planning schedule, with Shell now indicating that drilling is
expected to commence towards the end of Q3 2022.
Licence P2252, located in the Southern North Sea Gas Basin,
contains the Pensacola prospect which is estimated to contain gross
P50 Prospective Resources of 309 BCF in a Zechstein carbonate
build-up. The licence was farmed out to Shell U.K. Ltd in 2019,
which resulted in the Company being fully carried through the 3D
seismic acquisition and processing-based work programme through to
well investment decision. Following the well investment decision on
29 March 2021, Deltic is now paying its 30% share of costs
associated with this well and remains fully funded for its
share.
During the period, a review of the additional potential
prospectivity associated with the P2252 licence, but unrelated to
Pensacola, was completed by the Operator and the JV took the
decision to relinquish the southern portion of P2252 licence and
realise a significant saving on annual licence rental costs. The
relinquished area represented approximately 40% of the overall
licence area and contained the Lytham prospect which was not
considered sufficiently attractive to retain.
P2437 - Selene (50% Deltic)
During the period, Deltic continued to refine its subsurface
models and development scenarios for the Selene prospect. This work
has resulted in an uplift in Gross P50 Prospective Resources from
271 BCF to 318 BCF and a tightening of the P90-10 range from 82-552
BCF to 132-581 BCF. The geological chance of success (GCoS) remains
unchanged at 70%.
Deltic remains convinced that the Selene prospect is a
significant and strategic exploration opportunity in the mature
Leman Sandstone fairway and remains fully committed to drilling an
exploration well on the prospect at the soonest practicable
opportunity.
Licence P2437 is located in the Leman Sandstone fairway of the
Southern North Sea Gas Basin and contains the Selene prospect which
we believe is the largest undrilled prospect in this mature play.
The P2437 licence was farmed out to Shell U.K. Ltd in 2019 with
Deltic retaining a 50% interest and operatorship until a final well
investment decision is made. Under the terms of the farm-out, once
the well investment decision is taken, Shell assume operatorship
and pay for 75% of the costs of the initial exploration well up to
a gross well cost of USD$25M.
P2428 - Cupertino / Plymouth Area (40% Deltic)
Licence P2428 contains prospects in each of the Carboniferous,
Leman Sandstone and Zechstein Carbonates and was included in the
farm-out to Capricorn announced in August. Following completion of
that transaction, a 60% working interest in licence P2428, along
with licence operatorship, has been transferred to Capricorn. Under
the terms of the farm-in agreement Capricorn are paying 100% of the
costs of the technical evaluation for the licence up until the
point at which a firm well investment decision is made.
The primary target on the P2428 licence area is the Plymouth
Zechstein reef prospect and as part of the farm-out agreement
Capricorn funded the acquisition of 680km(2) of new multi-client 3D
data over the Plymouth prospect and surrounding areas. The 3D
seismic acquisition was completed in late November 2021 and data
processing is ongoing with final deliverables expected in May 2022.
Early versions of the seismic data have been viewed and a clearer
picture of the Plymouth prospect and other potential opportunities
on block are starting to emerge. Once the processing workflows have
been completed, we expect that this new 3D seismic data will allow
a full evaluation of the Plymouth prospect and other opportunities
in the underlying Leman and Carboniferous Sandstones.
A drilling decision is expected to be made in the second half of
this year once this new data has been fully evaluated by the
Capricorn-Deltic JV.
P2567 - Cadence (40% Deltic)
Licence P2567 contains prospects in both the Carboniferous and
Triassic Bunter Sandstone and was included in the farm-out to
Capricorn announced in August. Following completion of that
transaction, a 60% working interest in licence P2567, along with
licence operatorship, has been transferred to Capricorn. Under the
terms of the farm-out agreement Capricorn are paying 100% of the
costs of the technical evaluation of the licence up until the point
at which a firm well investment decision is made.
It is anticipated that technical work over the coming months
will focus on the reprocessing of the legacy 3D seismic survey that
covers 100% of the licence area which will in turn be followed by
detailed technical evaluation of the previously identified
prospectivity.
P2560, P2561 & P2562 - South Breagh Area (30% Deltic)
Licences P2560, P2561 and P2562 were awarded in the most recent
32(nd) Licensing Round. The licences contain early stage
exploration opportunities located between the Breagh and Tolmount
gas fields and have significant potential in the Carboniferous
sandstones, Permian Leman Sandstones and the Zechstein
carbonates.
All three licences were included in the farm-out to Capricorn
and following completion of that transaction, a 70% working
interest in each of the three licences, along with licence
operatorship, has been transferred to Capricorn. Under the terms of
the farm-out agreement Capricorn are paying 100% of the costs of
the technical evaluation for each licence up until the point at
which a firm well investment decision is made on each licence.
During and post the transaction process, Deltic has worked
closely with Capricorn to ensure that the JV is fully aligned with
respect to the exploration potential over the area and Capricorn
continue to evaluate the existing legacy datasets and develop a
comprehensive exploration work programme for the area. We expect
that reprocessing a number of the legacy 3D seismic datasets will
be the priority over the coming 6 to 12 months which will provide a
sound basis for the more detailed geological evaluation required to
mature a number of the identified leads into potential drilling
opportunities.
P2352 - Dewar (100% Deltic)
Licence P2352, located in the Central North Sea, was awarded to
the Company in the 30th UK Offshore Licensing Round with an
effective date of 1 October 2018.
During the period, work continued on fully integrating the
previously completed AVO study into the company's geological model
for the Dewar prospect. As a result of this work, the geological
model for this Forties Sandstone channel prospect is now much more
robust. However, the gross P50 Prospective Resources have been
reduced from 39.5mmbo to 20.8mmbo with a P90-P10 range of 10 to
38.2mmbo. The GCoS of 41% remains unchanged.
In the event of exploration success, the Dewar Prospect will
represent a highly attractive commercial proposition as it is
located approximately 5km east of BP's Eastern Trough Area Project
(ETAP) Central Processing Facility.
With the recent recovery in oil prices, there has been a renewed
interest in the Dewar Prospect and over the coming months we will
continue to pursue farm-out discussions with companies that have
shown recent interest and those with whom we had established a
positive dialogue prior to the Covid enforced lockdowns.
P2542 - Syros (100% Deltic)
Licence P2542 located in the Central North Sea and which
contains the Syros prospect, was awarded to Deltic in the most
recent 32(nd) Licensing Round. Technical work on this licence, has
commenced with newly reprocessed seismic data having recently been
obtained. Work will focus on maturing the Syros prospect using
recently released seismic and offset well datasets not available to
previous licence operators such that farm-out marketing can be
commenced in mid-2022.
Portfolio Management
As disclosed in our interim statement in September 2021, during
the period our technical review of Licence P2424 was completed.
Although we identified significant resource potential associated
with the Licence, the prospects identified were particularly high
risk when compared to other opportunities within the portfolio. The
currently available seismic datasets are not of sufficient quality
to adequately de-risk the prospects and therefore it was considered
unlikely that a positive well decision could be made on any
prospect within the licence area without the acquisition of new 3D
seismic data. Therefore, the decision was taken to allow this
licence to lapse at the end of its Phase A on 30 September
2021.
Licence P2384 in the Central North Sea which was awarded as a
remnant of a much larger multi-block licence application in the
30(th) Offshore Licensing Round and retained purely for its option
value. Following a review of the prospectivity associated with this
very small licence it was clear that it only captured the very
fringes of the prospects targeted in the original licence
application. Given that there was no obvious drilling target
located on block it was decided to also relinquish this licence on
30 September 2021.
33(rd) Licensing Round
The UK government recently announced its British Energy Security
Strategy on 6 April 2022 in which a new offshore licensing round,
scheduled to commence in the Autumn of 2022, was confirmed. Deltic
has been busy working on identifying and maturing a number of
potential opportunities in the Southern and Central North Seas
which we plan to use to support multiple licence applications on
both a 100% basis and in conjunction with established industry
partners.
Full details of the round, blocks available for licensing and
submission timelines are expected to be announced by the NSTA in
due course.
Andrew Nunn
Chief Operating Officer
22 April 2022
Southern North Sea
Portfolio and Resource Summary
The Company's current licence portfolio and prospect inventory,
as of the end of March 2022, is summarised below:
Licence Block Deltic Project ID Discovery Net Prospective GCoS
Ref: ID Equity (D) Resource %
Prospect (BCF)
(P)
Lead
(L)
---------------------
P90 P50 P10
Low Best High
----- ------ ------
41/5a,
41/10a Pensacola - Zechstein
P2252(1) & 42/1a 30% Reef P 12 93 354 55
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
P2437 48/8b 50% Sloop - Leman D 4 9 19 100
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
Selene - Leman P 66 159 290 70
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
Endymion - Leman L 18 24 31 27
------------------------ ---------- ----- ------ ------ -----
Rig & Jib - Leman L 7 18 29 35
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
43/7
&
P2428(2) 43/8 40% Cupertino - Scremerston P 37 148 454 26
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
Richmond - Leman P 25 84 219 20
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
Plymouth - Zechstein P 13 113 507 19
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
43/11
&
P2567(2) 43/12b 40% Cadence - Scremerston P 12 57 189 26
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
Cadence - Fell L 75 182 344 16
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
Cordova - Millstone
Grit L 13 50 131 26
------------------------ ---------- ----- ------ ------ -----
Bassett - Bunter
Sst P 14 51 121 37
------------------------ ---------- ----- ------ ------ -----
Bathurst - Bunter
Sst L 48 110 228 22
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
47/10d Bob (Teviot)
P2435(3) & 48/6c 25% - Leman D 2.8 5.5 10.3 100
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
Blackadder -
Leman P 17.8 28.3 42.5 45
---------- ---------- -------- ------------------------ ---------- ----- ------ ------ -----
P2258(1) 41/5b 30% Pensacola North To Be Determined
& 42/1b
---------- ---------- -------- ------------------------ ----------------------------------------
P2560(2) 42/13b 30% To Be Determined
42/17
& 42/18
---------- ---------- -------- ------------------------------------------------------------------
P2561(2) 42/19 30% To Be Determined
& 42/20b
---------- ---------- -------- ------------------------------------------------------------------
P2562(2) 42/22 30% To Be Determined
& 42/23
---------- ---------- -------- ------------------------------------------------------------------
(1) Operated by Shell
(2) Operated by Capricorn
(3) Operated by Parkmead
Central North Sea
Licence Block Deltic Project ID Discovery Net Prospective GCoS
Ref: ID (D) Resource %
Equity
Prospect (MMBOE)
(P)
Lead (L)
----------------------
P90 P50 P10
Low Best High
------ ------ ------
22/24f
P2352 & 22/25g 100% Dewar - Forties P 10 20.8 38.2 40
---------- -------- ----------------- ---------- ------ ------ ------ -----
Tesla - Pentland D To be determined -
mean STOIIP estimated
@ 24 mmboe
---------- -------- ----------------- ---------- -----------------------------
P2542 22/17a 100% Syros To be determined
---------- -------- ----------------- -----------------------------------------
Andrew Nunn
Chief Operating Officer
22 April 2022
Financial Review
All major expenditure in the last five years has been focussed
on the development of the Company's portfolio of conventional North
Sea assets in accordance with the Company's investing policy, in
addition to on-going administrative expenditure.
Loss for the year
The Company incurred a loss for the year to 31 December 2021 of
GBP1,935,052 (2020: GBP1,665,575), which includes a gain of
GBP298,173 (2020: nil) recognised on the farm out of Licence P2428
(Cupertino Prospect), Licence P2567 (Cadence Prospect) and Licences
P2560/P2561/P2562 (Breagh South Area) to Capricorn Energy PLC and
is included as other operating income in the Income Statement for
the year. A charge of GBP288,551 (2020: nil) is recognised
resulting from the write down on relinquished intangible assets
following the decision to relinquish Licences P2384 (Manhattan
Prospect) and P2424 (Cortez Prospect).
Administrative expenses of GBP1,912,987 (2020: GBP1,699,344)
were incurred during the year reflecting an increased level of
activity across the Company and its portfolio of assets. Finance
income of GBP2,905 (2020: GBP59,818) decreased due to lower
interest-bearing deposits on surplus funds. Finance costs of
GBP34,592 (2020: GBP26,049) represent the interest charge on a
lease liability recognised.
Financial position
The Company's cash was GBP10,092,205 at 31 December 2021 (2020:
GBP11,968,858) with the year-on-year decrease in cash being
explained below.
The increase in intangible assets to GBP2,203,118 (2020:
GBP1,430,915) reflects the development of the Company's exploration
portfolio and in particular progress towards drilling Licence P2252
(Pensacola Prospect), offset by the relinquishment of P2384
(Manhattan Prospect) and P2424 (Cortez Prospect), and the gain
recognised on the proceeds from farm-out of Licences P2428
(Cupertino Area), P2567 (Cadence Prospect) and P2560/P2561/P2562
(Breagh South Area). The Company was fully carried from the point
of farm out for costs associated with Licences P2428, P2567, P2560,
P2561 and P2562.
Property, plant and equipment of GBP385,240 (2020: GBP496,542)
includes a right of use asset relating to the office lease with a
net book value of GBP269,767 (2020: GBP350,697). Total current
liabilities, which include short-term creditors, accruals and lease
liabilities increased to GBP1,030,143 (2020: GBP246,041).
The decrease in total equity to GBP11,663,005 (2020:
GBP13,437,735) mainly represents the loss for the year and other
movements set out in the Statement of Changes in Equity.
Cash flow
In the year to 31 December 2021, the net cash outflow from
operating activities was GBP1,623,057 (2020: GBP1,368,118). The net
cash outflow from investing activities was GBP136,781 (2020:
GBP458,740), comprising GBP853,744 (2020: GBP358,672) related to
expenditure on exploration assets, GBP5,895 (2020: GBP159,886)
relating to expenditure of property, plant and equipment, and
GBP719,953 (2020: nil) receipt of proceeds from exploration licence
farm-in, and interest received of GBP2,905 (2020: GBP59,818). The
net cash outflow from financing activities was GBP116,815 (2020:
GBP53,684), comprising the principal portion of lease liabilities
and interest paid.
Consequently, in the year to 31 December 2021, the Company
experienced a net cash outflow of GBP1,876,653 (2020:
GBP1,880,542).
Closing cash and cash equivalents
As at 31 December 2021, the Company held cash and cash
equivalents totalling GBP10,092,205 (2020: GBP11,968,858).
Shareholders' equity
As at 31 December 2021, there were 1,405,964,855 (2020:
1,405,964,855) ordinary shares in issue. Additionally, a total of
up to 128,840,450 (2020: 94,840,450) new ordinary shares may be
issued pursuant to the exercise of share options.
Going concern
The Directors have assessed the Company's ability to continue as
a going concern. Although the oil and gas industry faces a period
of change under the current geopolitical environment, the Company
does not anticipate any negative issues impacting its ability to
operate as a going concern. Having taken the decision to raise
funds in 2019 the Company is currently well funded with no debt.
Based on the cash and cash equivalents balance at year end and the
Company's commitments, the Directors are of the opinion that the
Company has adequate financial resources to meet its committed
Pensacola exploration programme, based upon anticipated drilling
costs per the planned work schedule, and working capital
requirements, and accordingly will be able to continue and meet its
liabilities as they fall due for a minimum of 12 months from the
date of signing these financial statements.
Key performance indicators
At this stage in its development, the Company is focusing on the
development of its North Sea gas and oil assets, applying for
additional licences, maintaining and extending existing licences,
as well as the evaluation of various oil and gas opportunities that
may arise. The Directors closely monitor and manage the levels of
overheads and other administrative expenditure, exploration
expenditure, cash and deposit balances, as set out above. As and
when the Company's exploration licences move into production, other
key performance indictors (KPIs) will become relevant and will be
measured and reported as appropriate.
Sarah McLeod
Chief Financial Officer
22 April 2022
Investing Policy
In addition to the development of the North Sea gas licences the
Company has acquired to date, the Company proposes to continue to
evaluate other potential oil and gas projects in line with its
investing policy, as it aims to build a portfolio of resource
assets and create value for shareholders. As disclosed in the
Company's AIM Admission Document in May 2012, the Company's
substantially implemented Investment Policy is as follows:
The proposed investments to be made by the Company may be either
quoted or unquoted; made by direct acquisition or through farm-ins;
either in companies, partnerships or joint ventures; or direct
interests in oil & gas and mining projects. It is not intended
to invest or trade in physical commodities except where such
physical commodities form part of a producing asset. The Company's
equity interest in a proposed investment may range from a minority
position to 100% ownership.
The Board initially intends to focus on pursuing projects in the
oil & gas and mining sectors, where the Directors believe that
a number of opportunities exist to acquire interests in attractive
projects. Particular consideration will be given to identifying
investments which are, in the opinion of the Directors,
underperforming, undeveloped and/or undervalued, and where the
Directors believe that their expertise and experience can be
deployed to facilitate growth and unlock inherent value.
The Company will conduct initial due diligence appraisals of
potential projects and, where it is believed further investigation
is warranted, will appoint appropriately qualified persons to
assist with this process. The Directors are currently assessing
various opportunities which may prove suitable although, at this
stage, only preliminary due diligence has been undertaken.
It is likely that the Company's financial resources will be
invested in either a small number of projects or one large
investment which may be deemed to be a reverse takeover under the
AIM Rules. In every case, the Directors intend to mitigate risk by
undertaking the appropriate due diligence and transaction analysis.
Any transaction constituting a reverse takeover under the AIM Rules
will also require Shareholder approval.
Investments in early stage and exploration assets are expected
to be mainly in the form of equity, with debt being raised later to
fund the development of such assets. Investments in later stage
projects are more likely to include an element of debt to equity
gearing. Where the Company builds a portfolio of related assets, it
is possible that there may be cross holdings between such
assets.
The Company intends to be an involved and active investor.
Accordingly, where necessary, the Company may seek participation in
the management or representation on the Board of an entity in which
the Company invests with a view to improving the performance and
use of its assets in such ways as should result in an upward
re-rating of the value of those assets.
Given the timeframe the Directors believe is required to fully
maximise the value of an exploration project or early stage
development asset, it is expected that the investment will be held
for the medium to long term, although disposal of assets in the
short term cannot be ruled out in exceptional circumstances.
The Company intends to deliver Shareholder returns principally
through capital growth rather than capital distribution via
dividends, although it may become appropriate to distribute funds
to Shareholders once the investment portfolio matures and
production revenues are established.
Given the nature of the Investing Policy, the Company does not
intend to make regular periodic disclosures or calculations of its
net asset value.
The Directors consider that as investments are made, and new
investment opportunities arise, further funding of the Company will
be required.
This strategic report contains certain forward-looking
statements that are subject to the usual risk factors and
uncertainties associated with the oil and gas exploration and
production business. Whilst the Directors believe the expectation
reflected herein to be reasonable in light of the information
available up to the time of their approval of this report, the
actual outcome may be materially different owing to factors either
beyond the Company's control or otherwise within the Company's
control but, for example, owing to a change of plan or strategy.
Accordingly, no reliance may be placed on the forward-looking
statements.
On behalf of the Board
Mark Lappin Graham Swindells
Chairman Chief Executive Officer
22 April 2022 22 April 2022
Qualified Person
Andrew Nunn, a Chartered Geologist and Chief Operating Officer
of Deltic Energy Plc, is a "Qualified Person" in accordance with
the AIM Note for Mining, Oil and Gas Companies of the London Stock
Exchange. Andrew has reviewed and approved the information
contained within this announcement.
**S**
For further information please contact the following:
Deltic Energy Plc Tel: +44 (0) 20 7887
2630
Graham Swindells / Andrew Nunn / Sarah McLeod
Allenby Capital Limited (Nominated Adviser Tel: +44 (0) 20 3328
& Joint Broker) 5656
David Hart / Alex Brearley (Corporate Finance)
Kelly Gardiner (Sales and Corporate Broking)
Stifel Nicolaus Europe Limited (Joint Broker) Tel: +44 (0) 20 7710
7600
Callum Stewart / Simon Mensley / Ashton
Clanfield
Vigo Consulting (IR &PR Adviser) Tel: +44 (0) 20 7390
0230
Patrick d'Ancona / Finlay Thomson / Oliver
Clark
Glossary of Technical Terms
PRMS: Petroleum Resources Management System (2007)
BCF: Billion Cubic Feet
GIIP: Gas Initially In Place
SCF: Standard Cubic Feet
STOIIP Stock-Tank Oil Initially In Place
Mmbbl Million barrels
mmboe: Million barrels of oil equivalent
Prospective Resources: Are 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.
Chance of Success (GCoS): for prospective resources, means the
chance or probability of discovering hydrocarbons in sufficient
quantity for them to be tested to the surface. This, then, is the
chance or probability of the prospective resource maturing into a
contingent resource. Prospective resources have both an associated
chance of discovery (geological chance of success) and a chance of
development (economic, regulatory, market and facility, corporate
commitment and political risks). The chance of commerciality is the
product of these two risk components. These estimates have been
risked for chance of discovery but not for chance of
development.
TCF: Trillion Cubic Feet
P90 resource: reflects a volume estimate that, assuming the
accumulation is developed, there is a 90% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a low estimate of resource.
P50 resource: reflects a volume estimate that, assuming the
accumulation is developed, there is a 50% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a median or best case estimate of resource.
P10 resource: reflects a volume estimate that, assuming the
accumulation is developed, there is a 10% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a high estimate of resource.
Pmean: is the mean of the probability distribution for the
resource estimates. This is often not the same as P50 as the
distribution can be skewed by high resource numbers with relatively
low probabilities.
The GIIP volumes and Prospective Resources have been presented
in accordance with the 2007 Petroleum Resources Management System
(PRMS) prepared by the Oil and Gas Reserves Committee of the
Society of Petroleum Engineers (SPE), reviewed, and jointly
sponsored by the World Petroleum Council (WPC), the American
Association of Petroleum Geologists (AAPG) and the Society of
Petroleum Evaluation Engineers (SPEE).
Income Statement
for the year ended 31 December 2021
Notes 2021 2020
Continuing operations GBP GBP
Administrative expenses:
Write down on relinquished intangible
assets 10 (288,551) -
Other administrative expenses (1,912,987) (1,699,344)
--------------------------------------- ----- ----------- -----------
Total administrative expenses (2,201,538) (1,699,344)
Other operating income 10 298,173 -
----------- -----------
Operating loss (1,903,365) (1,699,344)
Finance income 4 2,905 59,818
Finance costs 5 (34,592) (26,049)
--------------------------------------- ----- ----------- -----------
Loss before tax 6 (1,935,052) (1,665,575)
Income tax expense 8 - -
--------------------------------------- ----- ----------- -----------
Loss for the year (1,935,052) (1,665,575)
--------------------------------------- -----
Loss per share from continuing
operations
expressed in pence per share:
Basic 9 (0.14)p (0.12)p
--------------------------------------- ----- ----------- -----------
Statement of Comprehensive Income
for the year ended 31 December 2021
2021 2020
GBP GBP
Loss for the year (1,935,052) (1,665,575)
Other comprehensive income - -
------------------------------------------------------- ----------- -----------
Total comprehensive expense for the year attributable
to the equity holders of the Company (1,935,052) (1,665,575)
-------------------------------------------------------- ----------- -----------
Balance Sheet
as at 31 December 2021
Notes 2021 2020
GBP GBP
Assets
Non-current assets
Intangible assets 10 2,203,118 1,430,915
Property, plant and equipment 11 385,240 496,542
Other receivables 12 37,422 37,422
--------------------------------------------- ----- ------------ ------------
Total non-current assets 2,625,780 1,964,879
Current assets
Trade and other receivables 12 190,398 53,887
Cash and cash equivalents 10,092,205 11,968,858
--------------------------------------------- ----- ------------ ------------
Total current assets 10,282,603 12,022,745
Total assets 12,908,383 13,987,624
--------------------------------------------- ----- ------------
Capital and reserves attributable to the
equity holders of the Company
Shareholders' equity
Share capital 13 7,029,824 7,029,824
Share premium 20,296,030 20,296,030
Share-based payment reserve 21 1,150,700 990,378
Accumulated retained deficit (16,813,549) (14,878,497)
--------------------------------------------- ----- ------------ ------------
Total equity 11,663,005 13,437,735
--------------------------------------------- ----- ------------ ------------
Liabilities
Current liabilities
Trade and other payables 15 931,148 153,436
Lease liabilities 17 98,995 92,605
--------------------------------------------- ----- ------------ ------------
Total current liabilities 1,030,143 246,041
--------------------------------------------- ----- ------------ ------------
Non-current liabilities
Lease liabilities 17 215,235 303,848
--------------------------------------------- ----- ------------ ------------
Total non-current liabilities 215,235 303,848
--------------------------------------------- ----- ------------ ------------
Total liabilities 1,245,378 549,889
--------------------------------------------- ----- ------------ ------------
Total equity and liabilities 12,908,383 13,987,624
--------------------------------------------- ----- ------------ ------------
Statement of Changes in Equity
for the year ended 31 December 2021
Share Share Share-based Accumulated Total
capital premium payment retained equity
reserve deficit
GBP GBP GBP GBP GBP
Balance at 1 January 2021 7,029,824 20,296,030 990,378 (14,878,497) 13,437,735
Comprehensive income for the year
Loss for the year - - - (1,935,052) (1,935,052)
-------------------------------------------- --------- ---------- ----------- ------------ -----------
Total comprehensive loss for the
year - - - (1,935,052) (1,935,052)
Contributions by and distributions
to owners
Share-based payment - - 160,322 - 160,322
Total contributions by and distributions
to owners - - 160,322 - 160,322
Balance at 31 December 2021 7,029,824 20,296,030 1,150,700 (16,813,549) 11,663,005
-------------------------------------------- --------- ---------- ----------- ------------ -----------
Balance at 1 January 2020 7,029,824 20,296,030 842,644 (13,212,922) 14,955,576
Comprehensive income for the year
Loss for the year - - - (1,665,575) (1,665,575)
-------------------------------------------- --------- ---------- ----------- ------------ -----------
Total comprehensive loss for the
year - - - (1,665,575) (1,665,575)
Contributions by and distributions
to owners
Share-based payment - - 147,734 - 147,734
Total contributions by and distributions
to owners - - 147,734 - 147,734
Balance at 31 December 2020 7,029,824 20,296,030 990,378 (14,878,497) 13,437,735
-------------------------------------------- --------- ---------- ----------- ------------ -----------
Statement of Cash Flows
for the year ended 31 December 2021
2021 2020
GBP GBP
Cash flows from operating activities
Loss before tax (1,935,052) (1,665,575)
Finance income (2,905) (59,818)
Finance costs 34,592 26,049
Gain from farm-out of licence interest (298,173) 2,783
Depreciation 115,355 106,029
Amortisation 5,625 6,712
Loss on disposal of property, plant and
equipment 1,842 -
Write down on relinquished intangible assets 288,551 -
Share-based payment 160,322 147,734
(1,629,843) (1,436,086)
Decrease/(increase) in other receivables (136,511) 38,269
Increase in trade and other payables 143,297 29,699
------------------------------------------------------- ----------- -----------
Net cash outflow from operating activities (1,623,057) (1,368,118)
------------------------------------------------------- ----------- -----------
Cash flows from investing activities
Purchase of intangible assets (853,744) (358,672)
Purchase of property, plant and equipment (5,895) (190,108)
Property, plant & equipment landlord contributions - 30,222
Proceeds from exploration licence farm-in 719,953 -
Interest received 2,905 59,818
Net cash outflow from investing activities (136,781) (458,740)
------------------------------------------------------- ----------- -----------
Cash flows from financing activities
Payment of principal portion of lease liabilities (82,223) (27,635)
Interest paid (34,592) (26,049)
Net cash outflow from financing activities (116,815) (53,684)
------------------------------------------------------- ----------- -----------
Decrease cash and cash equivalents (1,876,653) (1,880,542)
Cash and cash equivalents at beginning of
year 11,968,858 13,849,400
------------------------------------------------------- ----------- -----------
Cash and cash equivalents at end of year 10,092,205 11,968,858
------------------------------------------------------- ----------- -----------
Notes to the Financial Information
for the year ended 31 December 2021
1. Basis of preparation
The financial statements have been prepared in accordance with
UK adopted International Accounting Standards ('IAS'), as adopted
by the EU and with those parts of the Companies Act 2006 applicable
to companies reporting under International Financial Reporting
Standards ('IFRS').
The financial information for the year ended 31 December 2021
and 31 December 2020 set out in this announcement does not
constitute the Company's statutory financial statements for the
year ended 31 December 2021 but is extracted from the audited
financial statements for those years. The 31 December 2020 accounts
have been delivered to the Registrar of Companies. The statutory
financial statements for 2021 will be delivered to the Registrar of
Companies in due course.
While the financial information included in this announcement
has been prepared in accordance with the recognition and
measurement criteria of While the financial information included in
this announcement has been prepared in accordance with the
recognition and measurement criteria of UK adopted International
Accounting Standards ("UK adopted IASs") issued by the
International Accounting Standards Board and as endorsed for use by
the UK Endorsement Board, and with those parts of the Companies Act
2006 applicable to companies preparing their accounting under UK
adopted IASs, this announcement does not itself contain sufficient
information to comply with UK adopted IASs."
The principal accounting policies adopted in the preparation of
the financial information in this announcement are set out in the
Company's full financial statements for the year ended 31 December
2021.
Going concern
The Directors have assessed the Company's ability to continue as
a going concern. Although the oil and gas industry faces a period
of change under the current geopolitical environment, the Company
does not anticipate any negative issues impacting its ability to
operate as a going concern. Having taken the decision to raise
funds in 2019 the Company is currently well funded with no debt.
Based on the cash and cash equivalents balance at year end and the
Company's commitments, the Directors are of the opinion that the
Company has adequate financial resources to meet its committed
Pensacola exploration programme, based upon anticipated drilling
costs per the planned work schedule, and working capital
requirements, and accordingly will be able to continue and meet its
liabilities as they fall due for a minimum of 12 months from the
date of signing these financial statements.
2. Loss per Share
Basic loss per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
Due to the losses incurred during the year, a diluted loss per
share has not been calculated as this would serve to reduce the
basic loss per share. There were 128,840,450 (2020: 94,840,450)
share options outstanding at the end of the year that could
potentially dilute basic earnings per share in the future.
Basic and diluted loss per share
2021 2020
Loss per share from continuing operations (0.14)p (0.12)p
------------------------------------------- -------- --------
The loss and weighted average number of ordinary shares used in
the calculation of loss per share are as follows:
2021 2020
GBP GBP
Loss used in the calculation of total basic
loss per share (1,935,052) (1,665,575)
--------------------------------------------- ------------ ------------
Number of shares 2021 2020
Number Number
Weighted average number of ordinary shares
for the purposes of basic loss per share 1,405,964,855 1,405,964,855
-------------------------------------------- -------------- --------------
3. Intangible Assets
Exploration Software Total
& evaluation licences GBP
assets GBP
GBP
Cost
At 1 January 2020 1,115,605 39,257 1,154,862
Additions 309,685 - 309,685
At 31 December 2020 1,425,290 39,257 1,464,547
Additions 1,488,159 - 1,488,159
Farm-out of licence (421,780) - (421,780)
Disposals (288,551) - (288,551)
At 31 December 2021 2,203,118 39,257 2,242,375
--------------------------------- ------------- --------- ---------
Amortisation and impairment
At 1 January 2020 - 26,920 26,920
Charge for year - 6,712 6,712
At 31 December 2020 - 33,632 33,632
Charge for year - 5,625 5,625
At 31 December 2021 - 39,257 39,257
--------------------------------- ------------- --------- ---------
Net Book Value
At 31 December 2021 2,203,118 - 2,203,118
--------------------------------- ------------- --------- ---------
At 31 December 2020 1,425,290 5,625 1,430,915
--------------------------------- ------------- --------- ---------
At 1 January 2020 1,115,605 12,337 1,127,942
--------------------------------- ------------- --------- ---------
The net book value of exploration and evaluation assets at 31
December 2021 and 2020 relates solely to the Company's North Sea
Licences.
Aggregate cash proceeds arising from the farm-out of five
Licences (P2428, P2567, P2560, P2561, P2562) to Capricorn during
the year amounted to GBP719,953. An amount of GBP421,780 was
deducted from exploration and evaluation assets, being the
previously capitalised expenditure relating to that licence. The
surplus of the proceeds over the carrying value amounted to
GBP298,173 and was recognised as a gain on disposal of the partial
interest and included as other operating income in the Income
Statement for the year.
A charge of GBP288,551 (2020: nil) is recognised resulting from
the write down of relinquished intangible assets following the
decision to relinquish Licences P2384 (Manhattan Prospect) and
P2424 (Cortez Prospect).
Additions of GBP1,488,159 (2020: GBP309,685) differ to the cash
flows in the Statement of Cash Flows owing to an increase in trade
and other payables of GBP634,415 (2020: GBP48,987 decrease)
relating to intangible assets.
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