TIDMLRL
RNS Number : 6072R
Leyshon Resources Limited
29 October 2013
Leyshon Resources Limited
29 October 2013
SEPTEMBER 2013 QUARTERLY REPORT
Leyshon Resources Limited (AIM/ASX:LRL) ("Leyshon" or the
"Company") is pleased to provide an update on its activities
undertaken during the third quarter of 2013.
Zijinshan Gas Project
The Company, through its wholly owned subsidiary Pacific Asia
Petroleum Limited (PAPL), is progressing an early stage exploration
and appraisal programme on its Zijinshan Gas Project located on the
eastern fringe of the prolific Ordos Gas Basin in Central
China.
The main objective of the 2013 work programme is to define a
resource sufficient to delineate a third party independent resource
by the end of 2013 and to submit a Chinese Reserve Report (CRR) by
mid 2014.
In an announcement of 17 September 2013 on the completion of
drilling of well ZJS7, the Company advised that the exploration and
appraisal programme remains at a relatively early stage and
accordingly each well will be fully evaluated before proceeding
with the subsequent well.
The Company also notified that this would likely result in
slower progress in the overall programme than originally planned
(and as announced on 25 February 2013) and that an assessment of
the rate of progress of the ongoing programme will be undertaken
once the full results from the latest well are known and once it
has been agreed with its partner.
Subject to finalizing plans for the new programme with its
partner, and dependent on results, the Company and its partner are
considering a programme with a total expenditure of approximately
US$17 million pursuant to the 2013/14 exploration and appraisal
programme for the Zijinshan Gas Project, comprising inter alia,
drilling three wells, and fracking/testing two wells, with the
remainder comprising principally PSC maintenance costs and geology
studies.
It should be noted that drilling of these additional wells will
be dependent on favourable results from both the testing and
seismic programmes. It should also be noted that the programme
remains at an early stage in the exploration and appraisal phase of
de-risking the project and accordingly each well will be fully
evaluated before proceeding with the subsequent well.
Results of Well ZJS7
Well ZJS7 is located approximately three kilometres to the
northeast of well ZJS5, in the central part of the 380 square
kilometre central depression area. The well was drilled without
safety incident to a total depth of 2,266 metres targeting the same
potential pay zones as those intersected in well ZJS5.
The analysis of logs and side core samples is largely complete
and the results are consistent with those previously announced from
the wireline logging. Multiple potential pay zones have been
encountered with cumulative intervals of around 48 metres, as well
as 24 metres of coal seams.
The main target intervals have reported good porosity and in
some cases very high permeability but with low resistivity,
indicating the potential to flow water. In addition the gas
saturation levels are lower, and the water saturation higher, than
for the same zones elsewhere in the field. A detailed review is
underway to understand which zones will be flow tested.
The potential pay zones intersected included deeper zones which
are the main production horizons elsewhere in the Ordos Basin.
These zones are yet to be evaluated in this area of the field.
Overall the initial results have so far calibrated well with the
recently acquired seismic data. The interpretation of the central
depression area has been confirmed as relatively flat, bounded
between the outline of a large magmatic intrusion in the west and
regional scale faulting in the east, and rising slightly to the
north.
Exploration Period Renewal
As previously announced agreement has been reached between
Company's wholly owned subsidiary Pacific Asia Petroleum Limited
(PAPL) and its partner on the Zijinshan Production Sharing Contract
(PSC) to extend the exploration period of the PSC to the end of
2017. The PSC is valid for 30 years and expires in 2038.
PAPL has met all the requirements for the extension and an
application was submitted well ahead of the required date. The
preparation for the extension commenced late last year and is
expected to take several months to complete. An announcement will
be made once the process has completed.
It is common for extension applications, once agreed between the
PSC partners, to extend beyond the date of expiry whilst the
various regulatory approvals are achieved and for exploration
activities to continue as normal during this period; the Company
intends to continue as such.
Separation of Energy and Mineral Assets
Work continued on the demerger of the Company's energy assets
into Leyshon Energy Limited along with cash reserves of
approximately US$35 million. The Company now anticipates that the
requisite shareholder meeting to approve the demerger will be held
in late November or early December 2013. A notice of meeting will
be posted to shareholders in due course.
As previously announced, it is now intended that Leyshon Energy
Limited will only apply for admission to trading on AIM, and not on
both ASX and AIM.
The rationale for this and details of the risks associated with
the demerger will be included in the notice of meeting. A key
factor is that the Company now has approximately 86% of its shares
held outside Australia and over the past twelve months
approximately 89% of the liquidity has been on AIM.
The proposed demerger will involve an in-specie distribution of
shares in Leyshon Energy Limited to eligible shareholders of the
Company. For those shareholders who are deemed by the Company to be
ineligible because they reside in jurisdictions where the
distribution is prohibited or would in the Company's opinion impose
undue burdens on the Company, the corresponding Leyshon Energy
Limited shares will be sold by the Company and the net proceeds
returned to the shareholder. Further details will be included in
the notice of meeting.
Energy and Minerals Acquisitions
As previously announced, over the past several months, Leyshon
Resources has been actively pursuing acquisition and investment
opportunities in both the minerals and the oil and gas sectors, in
particular those which draw on the Company's China advantages.
There are a number of divestment processes underway for assets
in the region for which the Company has advanced its interest in
the normal course of business. A number of these acquisition
opportunities have been reviewed by the proposed directors of
Leyshon Energy Limited and they have determined that they could be
of interest to Leyshon Energy Limited.
In addition preliminary discussions have been held with
prospective debt and equity financiers with respect to these
potential acquisitions and a positive response has been received
regarding the level and types of funding which could be available
to Leyshon Energy Limited.
The Company has been invited by CNOOC to participate in the
forthcoming tender for one of twenty five offshore China
Exploration Blocks which are being made available for Foreign
Cooperation.
Leyshon Energy Limited intends to continue to actively pursue
these opportunities, a number of which have the potential to be
advanced quite rapidly following the demerger although there can be
no certainty any of these opportunities will be completed.
The Company continues to review acquisition opportunities in the
minerals sector as well as opportunities specifically related to Mt
Leyshon and intends to actively pursue these following the
demerger.
Cash and Liquidity
The Company has a strong cash position of US$38 million
(unaudited), held mainly in US dollars. With 249 million ordinary
shares on issue this represents approximately US$15 cents per
share, A$16 cents per share and 9 pence per share.
Liquidity in the Company's shares has declined significantly
during the period leading up to the proposed demerger. It is
anticipated that following the demerger investor relation
activities will be restarted with each of the Company and Leyshon
Energy Limited.
For further information please contact:
Leyshon Resources Limited
Paul Atherley - Managing Director
Tel: +86 137 1800 1914
admin@leyshonresources.com
Cantor Fitzgerald Europe
David Porter/Rick Thompson (Nominated Adviser)
Richard Redmayne (Corporate broking)
Tel: +44 (0)207 107 8000
http://www.leyshonresources.com
The qualified person, Frank Fu, who has reviewed this update,
has 21 years' experience in the oil & gas industry and is a
member of the Society of Petroleum Engineers.
Frank is currently the Chief Operations Officer for the Company
based in the Beijing office. He holds a BS Geology and Exploration
in Shanxi Mining College in Taiyuan, Shanxi. He joined the Company
in 2012, having spent the majority of his career at ConocoPhillips
in China and on its overseas gas and oil projects.
Appendix 5B
Mining exploration entity quarterly report
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98,
30/9/2001, 01/06/10.
Name of entity
LEYSHON RESOURCES LIMITED
-------------------------
ABN Quarter ended ("current
quarter")
75 010 482 274 30 September 2013
--------------- -----------------------
Consolidated statement of cash flows
Cash flows related to operating Current quarter Year to date
activities
(9 months)
$US'000 $US'000
---------------- -------------
1.1 Receipts from product sales - -
and related debtors
Payments for (a) exploration
& evaluation (1,989) (4,219)
(b) development - -
(c) production - -
1.2 (d) administration (286) (1,191)
1.3 Dividends received - -
Interest and other items
1.4 of a similar nature received 5 1,265
1.5 Interest and other costs - -
of finance paid
1.6 Income taxes paid (24) (195)
Other Mt Leyshon holding
1.7 costs (8) (556)
Net Operating Cash Flows (2,302) (4,896)
----- ---------------------------------- ---------------- -------------
Cash flows related to investing
activities
Payment for purchases of:
(a) prospects - -
(b) equity investments - -
1.8 (c) other fixed assets (1) (109)
1.9 Proceeds from sale of:
(a) prospects - -
(b) equity investments - -
(c) other fixed assets - -
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other - -
Net investing cash flows (1) (109)
---------------- -------------
Total operating and investing
1.13 cash flows (carried forward) (2,303) (5,005)
----- ---------------------------------- ---------------- -------------
Total operating and investing
1.13 cash flows (brought forward) (2,303) (5,005)
----- ----------------------------------
Cash flows related to financing
activities
1.14 Proceeds from issues of shares, - -
options, etc.
1.15 Proceeds from sale of forfeited - -
shares
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other - Share buy-back costs - -
Other - Transaction costs - -
---------- ----------
Net financing cash flows
- -
----- ---------------------------------- ----------
Net increase (decrease) in
cash held (2,303) (5,005)
Cash at beginning of quarter/year
1.20 to date 40,122 47,254
Exchange rate adjustments
1.21 to item 1.20 530 (3,900)
---------- ----------
1.22 Cash at end of quarter 38,349 38,349
----- ---------------------------------- ---------- ----------
Payments to directors of the entity and associates of the
directors
Payments to related entities of the entity and associates of the
related entities
Current quarter
$US'000
----------------
Aggregate amount of payments to the parties
1.23 included in item 1.2 177
----------------
1.24 Aggregate amount of loans to the parties -
included in item 1.10
-------- -------------------------------------------------- ----------------
1.25 Explanation necessary for an understanding of the transactions
Payments include managing director's remuneration and
non-executive directors' fees.
-----------------------------------------------------------------------------
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which
have had a material effect on consolidated assets and
liabilities but did not involve cash flows
Not Applicable.
-------------------------------------------------------
2.2 Details of outlays made by other entities to establish
or increase their share in projects in which the reporting
entity has an interest
Not Applicable.
------------------------------------------------------------
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available Amount used
$US'000 $US'000
3.1 Loan facilities - -
----------------- ------------
3.2 Credit standby arrangements - -
---- ---------------------------- ----------------- ------------
Estimated cash outflows for next quarter
$US'000
--------
4.1 Exploration and evaluation 3,800
--------
4.2 Development
-
--------
4.3 Production
-
--------
4.4 Administration 500
--------
Total 4,300
---- --------------------------- --------
Reconciliation of cash
Reconciliation of cash at the Current quarter Previous quarter
end of the quarter (as shown $US'000 $US'000
in the consolidated statement
of cash flows) to the related
items in the accounts is as follows.
---------------------------------------- ---------------- -----------------
5.1 Cash on hand and at bank 38,391 40,122
---------------- -----------------
5.2 Deposits at call
- -
---------------- -----------------
5.3 Bank overdraft
- -
---------------- -----------------
5.4 Other (provide details)
- -
---------------- -----------------
Total: cash at end of quarter
(item 1.22) 38,391 40,122
----- --------------------------------- ---------------- -----------------
Changes in interests in mining tenements
Tenement Nature of interest Interest Interest
reference (note (2)) at beginning at end
of quarter of quarter
----------- ------------------- -------------- ------------
6.1 Interests in mining None - - -
tenements relinquished,
reduced or lapsed
----------- ------------------- -------------- ------------
6.2 Interests in mining None - - -
tenements acquired
or increased
----------- ------------------- -------------- ------------
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or
conversion rights together with prices and dates.
Total number Number quoted Issue price Amount paid
per security up per security
(see note (see note 3)
3) (cents) (cents)
---------------------------- ------------- -------------- --------------- -----------------
7.1 Preference
+securities
(description)
------------- -------------- --------------- -----------------
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital,
buy-backs,
redemptions
----- --------------------- ------------- -------------- --------------- -----------------
+Ordinary
7.3 securities 249,457,212 249,457,212 Not Applicable Not Applicable
------------- -------------- --------------- -----------------
7.4 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital,
buy-backs
7.5 +Convertible
debt securities
(description)
------------- -------------- --------------- -----------------
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through securities
matured,
converted
7.7 Options (description Exercise Expiry date
and conversion price
factor)
------------- -------------- --------------- -----------------
7.8 Issued during
quarter
------------- -------------- --------------- -----------------
7.9 Exercised
during quarter
------------- -------------- --------------- -----------------
7.10 Expired during
quarter
------------- --------------
7.11 Debentures
(totals only)
------------- --------------
7.12 Unsecured
notes (totals
only)
------------- --------------
Compliance statement
1 This statement has been prepared under accounting policies
which comply with accounting standards as defined in the
Corporations Act or other standards acceptable to ASX (see note
4).
2 This statement does /does not* (delete one) give a true and
fair view of the matters disclosed.
Sign here:
............................................................ Date:
..29 October 2013.
(Director/Company secretary)
Print name: . MURRAY WYLIE.
Notes
1 The quarterly report provides a basis for informing the market
how the entity's activities have been financed for the past quarter
and the effect on its cash position. An entity wanting to disclose
additional information is encouraged to do so, in a note or notes
attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options
in respect of interests in mining tenements acquired, exercised or
lapsed during the reporting period. If the entity is involved in a
joint venture agreement and there are conditions precedent which
will change its percentage interest in a mining tenement, it should
disclose the change of percentage interest and conditions precedent
in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid
up is not required in items 7.1 and 7.3 for fully paid
securities.
4 The definitions in, and provisions of, AASB 1022: Accounting
for Extractive Industries andAASB 1026: Statement of Cash Flows
apply to this report.
5 Accounting Standards ASX will accept, for example, the use of
International Accounting Standards for foreign entities. If the
standards used do not address a topic, the Australian standard on
that topic (if any) must be complied with.
== == == == ==
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRTFEISIUFDSEFS
Leyshon Resources (LSE:LRL)
Historical Stock Chart
From May 2024 to Jun 2024
Leyshon Resources (LSE:LRL)
Historical Stock Chart
From Jun 2023 to Jun 2024
