29 September 2016
Doriemus PLC
(“Doriemus” or the
“Company”)
Unaudited Interim Results for the six
months to 30 June 2016
Doriemus PLC (ISDX: DOR), the London quoted UK focused oil and gas
production and exploration company, today announces its unaudited
interim results for the 6-month period ended 30 June 2016.
This has been a very exciting period for advancement of the
Company’s UK onshore oil and gas assets in the Weald Basin south of
London, in particular, the results
of the Horse Hill - 1 (“HH-1”) well near Gatwick Airport –
affectionately nicknamed the “Gatwick Gusher”. Doriemus now has
three exciting onshore oil projects in the Weald Basin and one on
the Isle of Wight, for which, the
Weald Basin projects will benefit from new geological knowledge
learnt from drilling and testing HH-1.
David Lenigas, Executive Chairman of Doriemus, commented:
"As your new Executive Chairman, I am pleased to be heading up
your Company as we head towards drilling the exciting Brockham
sidetrack well into the Portland Sandstone and Kimmeridge
limestones later this year, the long term flow testing at Horse
Hill and participating in a potential new well at the Lidsey Oil
Field next year. The exit of the UK from the European Union, in the
Company’s view, makes the resurgence of UK domestic oil production
even more important than previously and Doriemus is looking forward
to participating in this much needed home grown industry.”
Strategic Review for the Period:
Horse Hill – Weald Basin, UK:
Doriemus owns a 10% direct interest in Horse Hill Developments
Limited (“HHDL”). HHDL is a special purpose company that owns a 65%
participating interest and operatorship of Licence PEDL137 and the
adjacent Licence PEDL246 in the UK Weald Basin.
To the dismay of many commentators and academics in the UK, the
year kicked off with the very successful flow testing of the
Company’s Horse Hill -1 (“HH-1”) well discovery near Gatwick
Airport. This well, proved beyond doubt, that there is flowable
high quality oil in the Kimmeridge limestones, having previously
been derided publicly by some UK academics as being too immature to
host moveable oil. The HH-1 results have not only vindicated the
Company’s investment decisions to be an active partner in the Horse
Hill Licences, but increases the significance of the Kimmeridge
potential in Doriemus’ Brockham oil field in the Weald (see Outlook
Section below for the potential of the Brockham oil field).
As reported in March, the final total aggregate stable dry oil
flow rate from two Kimmeridge limestones plus the overlying
Portland sandstone in HH-1 stands at 1,688 barrels of oil per day
(“bopd”), a UK record for an onshore discovery well. Over the 30 to
90 hour flow periods from each of the 3 zones in HH-1, no clear
indication of any reservoir pressure depletion was
observed.
Flow Test Highlights:
- The final Portland test of 323 bopd, over an 8.5-hour, period
is the highest stable dry oil flow rate from any onshore UK
Portland well. On further testing, with a larger pump, the rate
doubled from the previously reported stable dry oil rate of 168
bopd. The Portland was produced at maximum pump capacity and showed
no clear indication of depletion. It is likely that the peak rate
can be further increased using a higher capacity downhole pump
during the next planned test.
- Proof that the Kimmeridge limestones contain significant
volumes of moveable light oil that can be flowed to surface at
commercial rates.
- The stable dry-oil flow rate of 464 bopd from the Lower
Kimmeridge Limestone is the first ever flow from this rock unit in
the Weald Basin and onshore UK.
- Based on the analysis of published reports, sighted by the
Directors, from all significant UK onshore discovery wells, the
Company Directors’ concludes that the well's 1,688 bopd is likely
the highest aggregate stable dry-oil flow from any onshore UK new
field discovery well.
- Based on the analysis of published reports from all significant
UK onshore discovery wells, the Company Directors’ concludes that
the 901 bopd from the Upper Kimmeridge zone is likely the highest
stable natural dry oil flow rate from a single reservoir in any UK
onshore new field discovery well.
- High quality Brent Crude produced: light, sweet oil (40 degrees
API in Kimmeridge, 35-37 degrees API in Portland) with 1,940
barrels delivered to the Esso Fawley refinery.
- Preliminary analysis confirms that the Lower and Upper
Kimmeridge Limestone units are naturally fractured reservoirs with
high deliverability.
- Strong possibility for further optimisation and increased flow
rates from all 3 zones in future development and production wells,
particularly through the use of horizontal wells.
Summary Table of Test Results: Horse
Hill -1 well – Weald Basin, UK
Zone |
Maximum
Instantaneous Oil Rate |
Stabilised Dry Oil
Rate |
Perforated
Interval |
Stabilised Flow
Period |
Depth Below
Surface |
|
bopd |
bopd |
ft |
hours |
ft |
U. Portland * |
360 |
323 |
103 |
8.5 |
2000 |
U. Kimmeridge ** |
1008 |
901 |
88 |
4.0 |
2800 |
L. Kimmeridge ** |
700 |
464 |
80 |
7.5 |
2950 |
Total |
2068 |
1688 |
271 |
20 |
|
Note: * flow rate
limited by pump stroke rate capacity ** natural flow |
HH-1 Overview and Recap:
The HH-1 discovery well, completed in November 2014, was the first modern well since
the 1980s to test the entire Jurassic and Triassic section of the
Weald Basin, reaching Palaeozoic basement at circa 8,500 feet. The
well was drilled with oil-based mud to ensure good electric log
data collection. A comprehensive suite of modern Schlumberger log
data, including magnetic resonance data, was acquired. Geological
samples were collected at 10 foot intervals throughout the well
specifically for geochemical analysis.
The analysis of thermal maturity data (vitrinite reflectance)
from geological samples, by a leading analyst in Switzerland, showed that the Kimmeridge
section of the well was within the peak oil generative window.
Previous researchers had stated that the Kimmeridge was thermally
immature, and whilst recognised to be the time equivalent of the
North Sea's main oil source rock, had likely only generated either
early stage immoveable bitumen or minor quantities of moveable oil,
as seen in the Upper Kimmeridge Limestone in Balcombe-1, 15 km to
the south of HH-1.
As previously announced by UK Oil & Gas PLC (“UKOG”),
geochemical analysis of samples throughout the c. 1300 feet thick
Kimmeridge shale section of HH-1, showed that the shales comprised
a world class oil source rock. Analysis of 277 samples showed 780
feet of drilled section exceeding 2% total organic carbon ("TOC")
by weight, with an average of 4.1% TOC. The richest section, and
possible sweet-spot, lay between the Upper and Lower Kimmeridge
Limestones with an average of 5% TOC and a high of 9.4% TOC. The
organic shales demonstrated high oil generative potentials ranging
from an average of 35 kg/tonne to a high of 103 kg/tonne and with
high Hydrogen Indices ("HI") averaging 754. Further significant
potential source rock sections were identified in the Middle
Jurassic and Lias sections of the well.
Both Nutech and Schlumberger, leaders in the field of electric
log analysis in rocks with low permeabilities, were then engaged by
UKOG to investigate the presence of oil in the HH-1 well. UKOG
reported the results during 2015, which indicated that a mean
estimated total of between 9.97 and 10.99 billion barrels of OIP,
or oil in the ground, existed under the HH-1 licence area,
contained in shales and limestones of the Kimmeridge, Oxford Clay
and Lias.
Brockham Oil Field:
(10% interest, operated by Angus Energy)
The Brockham Oil Field (“Brockham”), in the Weald Basin, is held
under UK Production Licence PL235. The Operator Angus Energy
advised that the January 2016
production rate was 24 bopd before the well was shut in. Brockham
production has been temporarily suspended to allow for significant
upgrades to the production site in readiness for a planned
sidetrack well designed to test the Portland sandstones and the
Kimmeridge limestones shown to produce oil at the nearby Horse Hill
- 1 well.
Subsequent Events and Outlook:
Horse Hill:
The operator at Horse Hill, HHDL, have advised that it is
seeking regulatory permissions to conduct extended production tests
from all 3 oil zones at the site, followed by a horizontal
side-track in the Kimmeridge limestones and a new Portland
appraisal and development well.
Brockham Oil Field:
On 13 September 2016, the Company
announced that US-based Nutech Ltd ("Nutech"), one of the world's
leading companies in petrophysical analysis and reservoir
intelligence, had independently assessed the Brockham-1 well.
Drilled by BP in 1987 under UK Production License PL 235, this
Weald Basin well sits approximately 6 miles north west of Gatwick
Airport, with an estimated total oil in place (“OIP”) of 281.7
million barrels of oil (“MMBO”) per square mile inclusive of all
reservoirs within the well.
The Executive Summary of the Nutech Report (“Nutech Report”) on
the Brockham-1 well and the complete Nutech Report can be seen on
the Company’s website.
In comparison, Nutech’s previous reported OIP assessment of the
the nearby Horse Hill-1 well (“HH-1”), located approximately 4.5
miles from the Brockham play, reported a total of 158 MMBO OIP per
square mile last year. This excluded the previously reported Upper
Portland Sandstone oil discovery previously announced on
9 April 2015. The flow testing of the
HH-1 well, as announce on 21 March
2016, reported a total aggregate stable dry oil flow rate of
1,688 barrels of oil per day from two of the three Kimmeridge
Limestones and the Portland Sandstone. The pay zones successfully
flow tested at HH-1 in February and March this year are similar to
those seen in the Brockham-1 well.
The operator, Angus Energy Limited (“Angus Energy”), has advised
production from Brockham has been temporarily suspended pending a
significant upgrade on its field surface facilities for continued
long term production from the site and to prepare for new oil
production from a planned sidetrack production well to be drilled
before the end of 2016.
In addition to the abandonment of the well-bores, a side-track
will be drilled to enhance production from the Portland sandstones
and asses the hydrocarbon potential in the Kimmeridge limestone
layers that have tested so successfully at the adjacent Horse
Hill-1 well. Doriemus is optimistic of the oil potential of
the Kimmeridge limestones at Brockham considering its close
proximity to Horse Hill.
Lidsey Oil Field:
At Lidsey Oil Field, the operator Angus Energy, have informed
the partners that it has started the regulatory approval process to
drill a new oil producer. The objective is to drill a new well
targeting the crest of the Oolite reservoir and drill a near
horizontal 1,500ft section through the reservoir to increase
production from the reservoir to potentially more than 300 barrels
of oil per day, as advised by Angus Energy.
Isle of
Wight:
(5% interest, operated by UK Oil & Gas Investments Plc)
On 10 August 2016, the Company
announced it had agreed to acquire all of the rights Angus Energy
Holdings UK Limited ("Angus") had
in respect of its 5% legal and beneficial interest in the 200 km2
onshore Isle of Wight oil and gas
licence (PEDL 331) together with all of Angus' rights in respect of its 5% interest in
the joint operating agreement to be entered into between UK Oil
& Gas Investments Plc, Solo Oil Plc and Angus.
The UK Oil & Gas Authority has confirmed the award of United
Kingdom Production Licence PEDL 331 ("PEDL 331") in the
Isle of Wight ("Licence") to the
following parties with the percentage interests set opposite their
names: UK Oil & Gas Plc (65 percent), Solo Oil Plc (30 percent)
and Angus (5 percent). The Oil
& Gas Authority are in the process of issuing the final form of
licence to the parties and that licence issue is expected to be
granted soon.
Cautionary Statement:
All of the reviews and reports mentioned above state that the
OIP volumes estimated should not be construed as recoverable
resources or reserves. All technical information referred to in
this statement has been previously verified by qualified personnel
– Please refer to previous news releases made by Doriemus.
Public Trading Platform for the
Company’s shares:
On 15 March 2016, the Company's
ordinary shares commenced trading on the ISDX Growth Market under
the ticker DOR and ceased trading on the London AIM market.
Financing – Rights Issue and Open
Offer to Shareholders:
On 6th September 2016 the Company
announced an Open Offer to raise up to £865,200 (before expenses),
Qualifying Shareholders are being offered the opportunity to
subscribe for up to 2,471,999,999 Open Offer Shares at a price of
£0.00035 (or 0.035 pence per share)
per Open Offer Share.
Financial Results:
During the period, the Company made a loss before taxation of
£243,000 (6 months ended 30 June
2015: loss £166,000, 12 months ended 31 December 2015: loss £310,000). There was a
weighted loss per share of 0.003p (30 June
2015: loss per share 0.002p, 31
December 2015: loss per share 0.004p).
The unaudited interim results to 30 June
2016 have not been reviewed by the Company’s auditor.
In Conclusion:
The Board would like to take this opportunity to thank our
shareholders, staff and consultants for their continued support and
I look forward to reporting further progress over the next period
and beyond and Doriemus playing a valuable part in the production
of domestic UK oil.
Competent Person’s Statement:
The technical information contained within this report is
extracted from Brockham’s Nutech Report, the technical information
on Horse Hill has previous been verified by appropriate industry
professionals (please refer to previous Company news releases) and
the information on the proposed Brockham side track well and Lidsey
has been approved by Angus Energy as operator of Brockham and
Lidsey. The final contents of this report, with respect to
technical information, have not been verified by a competent
person.
David Lenigas
Chairman
29 September 2016
For further additional information, please contact:
Doriemus plc
David Lenigas / Donald Strang |
+44 (0) 20 7440
0640 |
Peterhouse Corporate
Finance Limited
Nominated Adviser
Guy Miller / Fungai Ndore |
+44 (0) 20 7469 0930 |
Optiva Securities
Limited
Broker
Christian Dennis / Jeremy King |
+44 (0) 20 3137 1902 |
Square1
Consulting
Public Relations
David Bick |
+44 (0) 20 7929
5599 |
Company Statement of Comprehensive Income
Unaudited for the six months ended 30 June
2016
|
Six months
ended
30 June
2016
(unaudited) |
Six months
ended
30 June
2015
(unaudited) |
Year
ended
31 December
2015
(audited) |
|
£’000 |
£’000 |
£’000 |
|
|
|
|
Revenue |
1 |
34 |
57 |
Cost of Sales |
(3) |
(42) |
(99) |
Gross Profit |
(2) |
(8) |
(42) |
|
|
|
|
Administrative expenses |
(239) |
(158) |
(251) |
Depletion & impairment
charge |
(2) |
- |
(4) |
(Loss) from operations |
(243) |
(166) |
(297) |
|
|
|
|
Finance income |
- |
- |
(13) |
(Loss) on equity swap
settlements |
- |
- |
- |
Investment in subsidiary
written-off |
- |
- |
- |
(Loss) before income tax |
(243) |
(166) |
(310) |
|
|
|
|
Income tax expense |
- |
- |
- |
(Loss) attributable to the owners
of the parent and total comprehensive income for the
period |
(243) |
(166) |
(310) |
|
|
|
|
Other comprehensive
income |
|
|
|
Fair value adjustment of equity
swap |
(46) |
(24) |
(34) |
Other comprehensive income for
the period net of taxation |
(46) |
(24) |
(34) |
|
|
|
|
Total comprehensive income for
the period attributable to equity holders of the parent |
(289) |
(190) |
(344) |
|
|
|
|
|
|
|
|
(Loss) per share (Note
3) |
|
|
|
Basic (loss) per share |
(0.003)p |
(0.002)p |
(0.004)p |
Diluted (loss) per share |
(0.003)p |
(0.002)p |
(0.004)p |
Company Statement of Changes in Equity
Unaudited for the six months ended 30 June
2016
|
|
|
|
|
|
|
|
Share capital |
Share premium |
Share based payment
reserve |
Hedging reserve |
Retained earnings /
Accumulated losses |
Total |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
|
|
|
|
|
|
At 31 December 2014 |
57 |
2,940 |
236 |
(280) |
(1,032) |
1,921 |
|
|
|
|
|
|
|
Issue of Share capital |
20 |
1,180 |
- |
- |
- |
1,200 |
Share issue costs |
- |
(82) |
- |
- |
- |
(82) |
Transactions with owners |
20 |
1,098 |
- |
- |
- |
1,118 |
|
|
|
|
|
|
|
(Loss) for the year |
- |
- |
- |
- |
(310) |
(310) |
Unrealised (loss) on equity
swap |
- |
- |
- |
(34) |
- |
(34) |
Total comprehensive
loss for the year |
- |
- |
- |
(34) |
(310) |
(344) |
|
|
|
|
|
|
|
At 31 December 2015 |
77 |
4,038 |
236 |
(314) |
(1,342) |
2,695 |
|
|
|
|
|
|
|
(Loss) for the period |
- |
- |
- |
- |
(243) |
(243) |
Unrealised (loss) on equity
swap |
- |
- |
- |
(46) |
- |
(46) |
Total comprehensive
loss for the period |
- |
- |
- |
(46) |
(243) |
(289) |
|
|
|
|
|
|
|
At 30 June 2016 |
77 |
4,038 |
236 |
(360) |
(1,585) |
2,406 |
Company Statement of Financial Position
Unaudited as at 30 June 2016
|
As at
30 June
2016
(unaudited)
£’000 |
As at
30 June
2015
(unaudited)
£’000 |
As at
31 December
2015
(audited)
£’000 |
|
|
|
|
ASSETS |
|
|
|
Non-current
assets |
|
|
|
Intangible assets |
1,072 |
1,051 |
1,047 |
Available for Sale Investment |
900 |
600 |
850 |
|
|
|
|
Total non-current
assets |
1,972 |
1,651 |
1,897 |
|
|
|
|
Current assets |
|
|
|
Trade and other receivables |
667 |
423 |
437 |
Cash and cash equivalents |
233 |
1,257 |
719 |
|
|
|
|
Total current assets |
900 |
1,680 |
1,156 |
|
|
|
|
TOTAL ASSETS |
2,872 |
3,331 |
3,053 |
|
|
|
|
LIABILITIES |
|
|
|
Current liabilities |
|
|
|
Trade and other payables |
(306) |
(378) |
(244) |
Derivative financial
instruments |
(160) |
(104) |
(114) |
|
|
|
|
Total current
liabilities |
(466) |
(482) |
(358) |
|
|
|
|
TOTAL LIABILITIES |
(466) |
(482) |
(358) |
|
|
|
|
NET ASSETS |
2,406 |
2,849 |
2,695 |
|
|
|
|
Equity attributable to equity
holders of the parent |
|
|
|
|
|
|
|
Share capital |
77 |
77 |
77 |
Share premium reserve |
4,038 |
4,038 |
4,038 |
Share based payment reserve |
236 |
236 |
236 |
Hedging reserve |
(360) |
(304) |
(314) |
Retained earnings |
(1,585) |
(1,198) |
(1,342) |
|
|
|
|
TOTAL EQUITY |
2,406 |
2,849 |
2,695 |
Company Statement of Cash Flows
Unaudited for the six months ended 30 June
2016
|
Six months
ended
30 June
2016
(unaudited)
£’000 |
Six months
ended
30 June
2015
(unaudited)
£’000 |
Year
ended
31 December
2014
(audited)
£’000 |
|
|
|
|
Cash flows from operating
activities |
|
|
|
Operating (loss) |
(243) |
(166) |
(297) |
Adjustments for: |
|
|
|
Depletion & impairment
charge |
2 |
- |
4 |
(Increase) / decrease in trade and
other receivables |
(230) |
(15) |
150 |
Increase / (decrease) in trade and
other payable |
62 |
122 |
(12) |
Net cash generated from operating
activities |
(409) |
(59) |
(155) |
|
|
|
|
Cash flows from investing
activities |
|
|
|
Payments for intangible assets |
(27) |
- |
- |
Loans (granted) to related
parties |
(50) |
- |
(179) |
Payment for AFS Investment |
- |
- |
(250) |
Net cash used in investing
activities |
(77) |
- |
(429) |
|
|
|
|
Cash flows from financing
activities |
|
|
|
Proceeds from issuance of ordinary
shares |
- |
1,200 |
1,200 |
Share issue costs |
- |
(82) |
(82) |
Finance expense paid |
- |
- |
(13) |
Equity swap settlements
receipts |
- |
- |
- |
Net cash used in financing
activities |
- |
1,118 |
1,105 |
|
|
|
|
Net increase/(decrease) in cash
and cash equivalents |
(486) |
1,059 |
521 |
|
|
|
|
Cash and cash equivalents at
beginning of period |
719 |
198 |
198 |
|
|
|
|
Cash and cash equivalents at end
of period |
233 |
1,257 |
719 |
|
|
|
|
Cash and cash equivalents
comprise: |
|
|
|
Cash available on demand |
233 |
1,257 |
719 |
Notes to the unaudited financial statements for the 6 months to
30 June 2016
1.
Basis of preparation
As permitted IAS 34, ‘Interim Financial Reporting’ has not been
applied to these half-yearly results. The financial information of
the Company for the six months ended 30 June
2016 have been prepared in accordance with the recognition
and measurement principles of International Financial Reporting
Standards, International Accounting Standards and Interpretations
(collectively “IFRS”) issued by the International Accounting
Standards Board (“IASB”) as adopted by the European Union (“adopted
IFRS”) and are in accordance with IFRS as issued by the IASB. The
condensed interim financial information has been prepared using the
accounting policies which will be applied in the Company’s
statutory financial statements for the year ending 31 December
2015.
The financial information shown in this publication is unaudited
and does not constitute statutory accounts as defined in Section
434 of the Companies Act 2006. The comparative figures for the
financial year ended 31 December 2015
have been derived from the statutory accounts for the year ended 31
December 2015. The statutory accounts have been delivered to
the Registrar of Companies. The auditors have reported on
those accounts and their report was unqualified and did not contain
statements under the section 498(2) or 498(3) of the Companies Act
2006.
The Condensed Consolidated Interim Financial Information was
approved by the Board of Directors on 28
September 2016.
2.
(Loss) / earnings per share
The calculation of the basic and diluted (loss) / earnings per
share is based upon
|
30 June
2016 |
30 June
2015 |
31 December
2015 |
|
|
|
|
Basic (loss) / earnings per share
(pence) |
(0.003)p |
(0.002)p |
(0.004)p |
Diluted (loss) / earnings per share
(pence) |
(0.003)p |
(0.002)p |
(0.004)p |
(Loss) / profit attributable to
equity shareholders |
(£243,000) |
(£166,000) |
(£310,000) |
Weighted
average number of shares basic |
7,739,999,998 |
6,889,171,269 |
7,350,988,902 |
Weighted average number
of shares diluted |
8,129,999,998 |
7,279,171,269 |
7,490,958,902 |
3.
Events after the end of the reporting period
On 10th August 2016 the Company
announced it had acquired all of the rights Angus Energy Holdings
UK Limited ("Angus") has in
respect of its 5% legal and beneficial interest in the 200 km2
onshore Isle of Wight oil and gas
licence (PEDL 331)
On 6th September 2016 the Company
announced an Open Offer to raise up to £865,200 (before expenses),
Qualifying Shareholders are being offered the opportunity to
subscribe for up to 2,471,999,999 Open Offer Shares at a price of
£0.00035 per Open Offer Share.
4.
Availability of the Interim Report
Copies of the report will be available from the Company’s
registered office and also from the Company’s website
www.doriemus.co.uk.