10 May 2017
DORIEMUS PLC
(“Doriemus” or the
“Company”)
Audited Final Results for Year Ending
31 December 2016
Chairman’s Statement
incorporating the Strategic Report
2016 and the early part of 2017 (post reporting period) has seen
significant advances towards oil production from both our Brockham
and Horse Hill oil assets in the UK’s onshore Weald Basin near
London’s Gatwick Airport and as we move towards drilling the second
production well at the Lidsey Oil Field this year.
Overview:
The Company owns three valuable oil and gas assets in the new UK
onshore oil province centred around the new Kimmeridge oil
discoveries in the Weald Basin south of London. We firmly believe that all of these
assets hold a very real chance of being significant UK onshore oil
producing areas over the coming year with Doriemus set to benefit
significantly with the commencement of positive cash flow from at
least Brockham and Lidsey. We also believe that the new oil
production from the Weald Basin may well prove to be of significant
strategic importance to the UK in the years to come, especially
considering the recent declines seen in the UK’s North Sea offshore
oil production and as the country moves to separate from the
European Union, making indigenous oil production more
important.
Brockham Oil Field:
(Doriemus holds a direct 10%
interest in Brockham, operated
by Angus Energy Plc, the “Operator”)
The 8.9km2 Brockham Oil Field (“Brockham”), in the
Weald Basin, is held under UK Licence PL235 (Production
Licence).
On 3 March 2017 (post year end),
it was announced that the Brockham X4Z well, designed to evaluate
the Portland, Corallian and Kimmeridge formations at Brockham
(including an evaluation of the Kimmeridge reservoir that had been
demonstrated by the Horse Hill discovery only 8km to the South),
was drilled to a total depth of 1,391m.
The Brockham X4Z well was intended to establish whether the
reservoir reported at the adjacent Horse Hill discovery extended
further north into the Brockham Licence.
The preliminary results from Brockham X4Z well confirmed very
similar thickness of reservoir and properties to those reported at
Horse Hill. The gross thickness of Kimmeridge in Brockham X4Z was
found to be some 385m thick. The two limestone intervals (each
around 30m) tested in Horse Hill are also seen in the Brockham well
and the reservoir properties appear to be very similar to Horse
Hill, based on electrical logging evidence.
The Operator used Weatherford’s Ultra Wave Acoustic borehole
imaging tool for first time in Europe. This tool made it possible to directly
see fractures in the borehole. The Ultra Wave information confirmed
not only evidence of natural fractures in the two main limestones
intervals previously tested at Horse Hill, but also confirmed
abundant natural fractures were evident in sections of the
interbedded shales and limestones between and below the two main
limestones. Around 200m of the reservoir showed this potential.
Geochemical analysis on the drilling samples showed total
organic content through the Kimmeridge section of between 2-12%,
exceeding Horse Hill in places. Furthermore, evidence showed that
the highest organic content corresponds to the limestones and, in
particular, the intervals in between the limestones which have
natural fracturing. Whilst organic content is not the same as oil
content, it is indicative of those sections where oil content will
be the highest. This supports the potential for some 200m of
reservoir of interest. Initial Tmax and Hydrogen Index readings
also corresponded with Horse Hill’s data.
Therefore, based on the evidence so far, the Operator has
confidence that the well will be similar to Horse Hill and perhaps,
given that the reservoir is potentially much thicker in zones not
previously tested, the final flow results could be even better.
In addition, oil shows were observed in the Portland and
Corallian formations whilst drilling the Brockham X4Z well.
Currently, the Brockham number 2 well is a temporarily suspended
producer from the Portland reservoir and the Operator is confident
of additional oil production from the Portland reservoir from the
Brockham X4Z well in due course. The good indications of both gas
and oil in the Corallian formation, below the Kimmeridge, is still
being evaluated.
After a major surface refit of the site infrastructure to
accommodate extra oil production, steps are now in hand to install
new production facilities for the well and to prepare for the
production as soon as the necessary OGA approvals are in place. The
Operator is targeting completion for production in spring/summer
2017.
Lidsey Oil Field:
(Doriemus holds a direct 20% interest in the onshore Lidsey Oil Field.
Operated by Angus Energy Plc, (the “Operator”)
The 5.3km2 Lidsey Oil Field (“Lidsey”), is located in
the southern portion of the UK’s onshore Weald Basin, and is held
under UK Licence PL 241 (Production Licence).
On 2 May 2017 (post year end) the
Operator announced that following the West Sussex County Council
approval, it had also received permission from the UK Environment
Agency to drill the Lidsey-X2 horizontal production well at the
Lidsey production oil field, license PL 241. The Group will now
seek the required approvals from the Health and Safety Executive
("HSE") and Oil and Gas Authority ("OGA").
The Lidsey Oil Field has planning consent for the development
and operation of a three wellhead and beam pump oil production
facility plus ancillary works at its Lidsey Oil Field. As permitted
by the site planning consent, the first well has already been
drilled at the site (Lidsey-X1) and the tophole/cellar is completed
and installed to enable a second well to be drilled (Lidsey-X2).
This second well has not yet been drilled and is planned to be
drilled to a depth of approximately 1,000 metres and will target
the upper crest of the Great Oolite reservoir that has been
producing oil from the Lidsey-X1 well which was first discovered in
1987, and until now has been temporarily suspended back in
February 2016 to allow for site
works. Lidsey-X2 will also assess the Kimmeridge formation which is
located above the Great Oolite reservoir.
Investment in Horse
Hill Developments Limited (“HHDL”):
(Doriemus holds a 10% interest in HHDL. Operated by HHDL)
The Company currently owns a 10% interest in a special purpose
company, Horse Hill Developments Limited, which is the operator and
65% interest holder in two Petroleum Exploration and Development
Licences (“PEDL”) PEDL137 and PEDL246 in the northern Weald Basin
between Gatwick Airport and London.
The PEDL137 licence covers 99.29 square kilometres (24,525
acres) to the north of Gatwick Airport in Surrey and contains the Horse Hill-1 (“HH-1”)
discovery well. PEDL246 covers an area of 43.58 square kilometres
(10,769 acres) and lies immediately adjacent and to the east of
PEDL137.
The HH-1 well is located approximately 7.5 kilometres southeast
of Doriemus’s producing Brockham Oil Field.
In August 2015, Schlumberger
independently verified Huston based Nutech’s previous Horse Hill
OIP estimates contained in PEDL137 and PEDL246. Schlumberger
estimated a Mean Oil in Place (“OIP”) of 10,993 billion barrels of
oil (“mmbbl”), with Kimmeridge OIP of 8,262 mmbbl. Schlumberger’s
Mean OIP estimates are therefore 19% higher in total than Nutech’s
P50 OIP estimate over the two Horse Hill licences and they were 58%
higher in the Kimmeridge.
After receiving permits from the Environment Agency and the Oil
and Gas Authority for the flow testing of the Horse Hill-1
discovery well, flow testing operations commenced in February 2016 and were completed in March 2016. Flow testing far exceeded all
expectations resulting in an aggregate stable oil rate of 1,688
barrels (“bbl”) per day of very high quality oil, from the Lower
Kimmeridge, Upper Kimmeridge and Upper Portland reservoirs. The
produced oil contained no water and no clear indication of any
reservoir pressure depletion was observed during the original flow
testing.
Based on analysis of published reports from all significant UK
onshore discovery wells, the 1,688 bbl per day flow rate is likely
to be the highest aggregate stable rate recorded from any onshore
UK discovery well.
The way forward on Horse Hill will now involve seeking
regulatory permissions to conduct extended production tests from
all 3 zones at the site, followed by a horizontal sidetrack in the
Kimmeridge and a possible new Portland development well.
(Note: All of the reviews and reports mentioned above state that
the OIP volumes estimated should not be construed as recoverable
resources or reserves.)
Investment in Greenland Gas
& Oil Plc
(2.82% interest in GGO)
The Company currently owns 2.82% equity shareholding in
Greenland Gas & Oil Plc
(“GGO”), a UK based oil and gas exploration company focused solely
on Greenland, which in
June 2015 was granted oil exploration
and exploitation licences over 4,200km2 located onshore
in south-eastern Greenland in a
region known as the Jameson Land Basin.
Public Trading Platform for the
Company’s shares:
On 15 March 2016, the Company's
ordinary shares commenced trading on the ISDX Growth Market (Now
called NEX Exchange) under the ticker DOR and ceased trading on the
London AIM market.
The Company’s Board had determined that due to the possible
delisting of trading of its shares on the London AIM market, and to
keep the Company’s shares trading on a regulated platform and given
the size and stage of development of the Company, that the London
ISDX Growth Market provides shareholders with the most appropriate
listing platform on which to promote the Company's growth
strategy.
The Reason for the Move from AIM to
ISDX:
Going back a number of years, the Company had previously
announced on 12 September 2014 that
the disposal of TEP Exchange ("TEP") had been completed. This
concluded the transition of the Company from the historical TEP
Exchange Group Plc, whose primary business was unsuccessful in the
licensing and on-line advertising of TEP's proprietary electronic
platform, to a company with a new focus of investing in
conventional oil and gas production and exploration activities in
Europe.
This disposal constituted a change of business for the purpose
of Rule 15 of the AIM Rules for Companies and therefore the Company
was, with effect from 12 September
2014, re-classified as an investing company.
As an investing company it was required to make an acquisition
or acquisitions which constituted a reverse takeover under the AIM
Rules or otherwise implement its investing policy within the next
12 months.
The existing investments in HHDL, Lidsey and Brockham made by
the Company prior to the disposal of TEP and the adoption of the
new investing policy pursuant to AIM Rule 15 did not count towards
the consideration as to whether the Company had implemented its
investing policy pursuant to AIM Rule 8.
The Company attempted to otherwise implement its investing
policy by investing the majority of its available cash in suitable
investments.
The investment committee conducted due diligence on several
further investment opportunities in the oil and gas sector in
Europe with potential for growth
in relation to implementing its investing strategy. However these
minority investments were not deemed sufficient for the Company to
be considered to have implemented its investing policy pursuant to
AIM Rule 8. It was considered, under the circumstances, that the
investment in GGO and potential reverse takeover of GGO represented
the best opportunity for the Company to implement its investing
strategy.
On 11 September 2015, the Company
announced that it had acquired an initial 2.82% equity shareholding
in Greenland Gas & Oil Plc
(“GGO”), a UK based oil and gas exploration company focused solely
on Greenland, and had entered into
an option agreement (the “Option”) to acquire a further 60.56% of
the existing share capital of GGO which expired on 31 March
2016. Exercise of the Option in full would have constituted a
reverse takeover under AIM Rule 14 and the Company therefore
requested that dealings in its Shares be suspended from trading on
AIM with immediate effect. However, as a reverse takeover was
not completed the Company's Shares were cancelled from AIM pursuant
to AIM Rule 41 on 14 March 2016. The Company had elected not
to exercise the Option following further due diligence and due to
the current low oil price environment.
On 15 March 2016, the Company was
admitted to trading on the ISDX Growth Market in order to take
advantage of that market’s profile, broad investor base, liquidity
and access to institutional investors. The Directors believe that
the Admission will (i) provide liquidity for current and future
investors in the Company; and (ii) provide the Company with the
flexibility to implement its Investing Policy going forward in
order to create greater Shareholder returns.
New Public Trading Platforms:
The Company is cognizant of the limited level of trading
activity of its shares on the NEX Exchange, and in order to address
this the Company is working with its advisors to seek a potential
listing on the LSE Standard List and also considering dual listing
the Company’s shares on a senior recognised stock exchange outside
of the UK. The paperwork required to apply for a move to the LSE
Standard List is both complex and complicated due primarily to the
requirements of the UKLA listing rules obtain full Competent
Persons Reports on all of the Company’s oil assets and work in this
regard remains ongoing.
Board Changes:
On 27 June 2016, Mr David Lenigas was appointed as the new Executive
Chairman of the Company with Grant
Roberts assuming the position of Non-Executive Director.
David Lenigas has extensive first
hand corporate and operational experience with all of Doriemus’s
oil assets, having previously served as Executive Chairman of UK
Oil & Gas Investments Plc.
Results for the period:
Loss for the year to 31 December
2016 amounted to £1,032,000 (2015: £310,000 loss) which
included £380,000 loss (2015: £nil) on the full equity swap
settlement, a share based payment charge of £207,000 (2015: £nil)
and approximately £215,000 (2015: £nil) of professional fees in
relation to the Company’s AIM de-listing and listing on the NEX
Exchange Growth market. £55,000 (2015: £99,000) related to Oil
Field expenses and the remaining £176,000 (2015: £ 268,000) related
to regulatory costs and other corporate overheads.
Total revenue for the period was £1,000 (2015: £57,000).
Outlook:
Oil Production on its way!
2017 and beyond should prove to be an exciting period ahead for
the Company and its shareholders as Doriemus moves towards being a
serious contributor to new UK onshore oil production and being an
active player in opening up the ultimate potential of the Weald
Basin. The past few years has seen a significant amount of
shareholders funds spent on drilling and evaluating new oil wells
in the Weald Basin and it is now time to see oil production lifted
from the reservoirs discovered in the Kimmeridge near Gatwick
Airport.
We will hopefully see our Brockham Oil Field producing
substantial amounts of oil from very wide pay intervals in the
Kimmeridge formation and will work closely with our partners on the
possibility of drilling a number of new production side-tracks and
new production wells once the Brockham X4Z well comes in to full
production over the spring/summer of 2017.
We will continue to seek out further investments in line with
the Company’s investing strategy and will also work closely with
HHDL and Angus Energy on potentially increasing our oil production
and reserves from the existing operating fields. Also as per our
investment strategy, the board will also look opportunistically at
investing in or acquiring, an appropriate percentage holding,
possibly including management, of a company or companies and
businesses in the global oil and gas sector.
The directors would like to take this opportunity to thank our
shareholders, staff and consultants for their continued
support.
David Lenigas
Executive Chairman
9 May 2017
The directors of the Company accept responsibility for the
contents of this announcement.
For further information please
contact:
Doriemus Plc:
www.doriemus.com
David Lenigas (Executive Chairman)
+44 (0) 20 74400640
Hamish Harris (Non-Executive
Director)
Peterhouse Corporate Finance
Limited
+44 (0) 20 7469 0930
Guy Miller
Fungai Ndore
Square 1 Consulting (Public Relations)
+44 (0) 20 7929 5599
David Bick
Statement of Comprehensive Income
for the year ended 31 December
2016
|
|
2016 |
2015 |
|
|
£’000 |
£’000 |
|
|
|
|
Revenue |
|
1 |
57 |
|
|
|
|
Cost of sales |
|
(54) |
(99) |
|
|
|
|
Gross (loss)/profit |
|
(53) |
(42) |
|
|
|
|
Administrative expenses |
|
(442) |
(251) |
Share based payment charge |
|
(207) |
- |
Depletion & impairment
charge |
|
(1) |
(4) |
|
|
|
|
(Loss) from operations |
|
(703) |
(297) |
|
|
|
|
Finance expense |
|
- |
(13) |
(Loss) on equity swap
settlements |
|
(380) |
- |
Unrealised gain on AFS
investments |
|
51 |
- |
|
|
|
|
(Loss) before income tax |
|
(1,032) |
(310) |
|
|
|
|
Income tax expense |
|
|
- |
|
|
|
|
(Loss) attributable to the owners
of the company |
|
|
|
and total comprehensive income
for the year |
|
(1,032) |
(310) |
|
|
|
|
Other comprehensive
income |
|
|
|
|
|
|
|
Fair value adjustment of equity
swap |
|
- |
(34) |
Transfer to income statement on
equity swap settlement |
|
314 |
- |
Other comprehensive income for
the year net of taxation |
|
314 |
(34) |
|
|
|
|
Total comprehensive income for
the period attributable to equity |
|
|
|
holders of the company |
|
(718) |
(344) |
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
Basic earnings per share |
|
(0.01)p |
(0.004)p |
Diluted earnings per share |
|
(0.01)p |
(0.004)p |
Statement of Changes in Equity
for the year ended 31 December
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 |
|
|
|
|
|
|
|
Issue of Share capital |
48 |
1,278 |
- |
- |
- |
1,326 |
Share issue costs |
- |
(95) |
- |
- |
- |
(95) |
Share based payment charge |
- |
- |
207 |
- |
- |
207 |
Share options cancelled |
- |
- |
(202) |
- |
202 |
- |
Transactions with owners |
48 |
1,183 |
5 |
- |
202 |
1,438 |
|
|
|
|
|
|
|
(Loss) for the year |
- |
- |
- |
- |
(1,032) |
(1,032) |
Transfer to income statement |
- |
- |
- |
314 |
- |
314 |
Total comprehensive
loss for the year |
- |
- |
- |
314 |
(1,032) |
(718) |
|
|
|
|
|
|
|
At 31 December 2016 |
125 |
5,221 |
241 |
- |
(2,172) |
3,415 |
Statement of Financial Position
at 31 December 2016
|
|
2016 |
2016 |
2015 |
2015 |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
Assets |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Intangible assets |
|
|
250 |
|
- |
Oil & gas properties |
|
|
1,101 |
|
1,047 |
Available for sale investments |
|
|
1,058 |
|
850 |
|
|
|
2,409 |
|
1,897 |
Current assets |
|
|
|
|
|
Trade and other receivables |
|
730 |
|
437 |
|
Cash and cash
equivalents |
|
537 |
|
719 |
|
Total current assets |
|
|
1,267 |
|
1,156 |
|
|
|
|
|
|
Total assets |
|
|
3,676 |
|
3,053 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
|
(261) |
|
(244) |
|
Derivative financial
instruments |
|
- |
|
(114) |
|
Total current
liabilities |
|
|
(261) |
|
(358) |
|
|
|
|
|
|
Total liabilities |
|
|
(261) |
|
(358) |
|
|
|
|
|
|
Net assets |
|
|
3,415 |
|
2,695 |
|
|
|
|
|
|
Equity attributable to
owners |
|
|
|
|
|
of the parent |
|
|
|
|
|
Share capital |
|
|
125 |
|
77 |
Share premium account |
|
|
5,221 |
|
4,038 |
Share based payment reserve |
|
|
241 |
|
236 |
Hedging reserve |
|
|
- |
|
(314) |
Retained earnings |
|
|
(2,172) |
|
(1,342) |
|
|
|
|
|
|
Total equity |
|
|
3,415 |
|
2,695 |
The financial statements were approved by the Board of Directors
and authorised for issue on 9 May
2017.
David Lenigas
Donald Strang
Director
Director
Statement of Cash Flows
for the year ended 31 December
2016
|
|
|
2016 |
|
2015 |
|
|
|
£’000 |
|
£’000 |
|
|
|
|
|
|
Cash flows from operating
activities |
|
|
|
|
|
(Loss) from operations |
|
|
(703) |
|
(297) |
Adjustments for: |
|
|
|
|
|
Depletion & impairment
charge |
|
|
1 |
|
4 |
Share based payment charge |
|
|
207 |
|
- |
(Increase)/decrease in trade and
other receivables |
|
|
(4) |
|
150 |
Increase/(decrease) in trade and
other payables |
|
|
17 |
|
(12) |
Net cash (outflow) from operating
activities |
|
|
(482) |
|
(155) |
|
|
|
|
|
|
Cash flows from investing
activities |
|
|
|
|
|
Payments for intangible
assets/OGP’s |
|
|
(106) |
|
- |
Loans advanced to related
parties |
|
|
(289) |
|
(179) |
Payments for AFS investments |
|
|
(157) |
|
(250) |
Net cash used in investing
activities |
|
|
(552) |
|
(429) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities |
|
|
|
|
|
Proceeds from Issuance of ordinary
share capital |
|
|
947 |
|
1,200 |
Share issue costs |
|
|
(95) |
|
(82) |
Finance expense paid |
|
|
- |
|
(13) |
Net cash generated in financing
activities |
|
|
852 |
|
1,105 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
(decrease)/increase in cash and cash equivalents |
|
|
(182) |
|
521 |
|
|
|
|
|
|
Cash, cash equivalents and bank
overdrafts |
|
|
|
|
|
at beginning of year |
|
|
719 |
|
198 |
|
|
|
|
|
|
Cash and cash equivalents at the
end of year |
|
|
537 |
|
719 |
|
|
|
|
|
|
Cash and cash equivalents
comprise: |
|
|
|
|
|
Bank & cash available on
demand |
|
|
537 |
|
719 |