TIDMORCA
RNS Number : 6891U
Orcadian Energy PLC
30 March 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the
publication of this announcement via Regulatory Information Service
(RIS), this inside information is now considered to be in the
public domain.
30 March 2023
Orcadian Energy plc
("Orcadian Energy", "Orcadian" or the "Company")
Results for the half year ended 31 December 2022
Orcadian Energy (AIM: ORCA), the low-emissions North Sea focused
oil and gas development company, is pleased to announce its
unaudited results for the six months ended 31 December 2022.
Activity Focus:
-- To improve the technical and commercial definition of the Pilot development project
-- To seek partners and finance for the Pilot development project
-- To maximise the value in our satellite discoveries and prospects
-- To prepare applications for new opportunities in the 33(rd) Round, now submitted
Highlights:
-- Secured a one-year extension to the P2244 licence, which includes the Pilot project
-- Completed a revision of the technical resources on Pilot
which resulted in a 18.4% upgrade to the P50 case (management
estimates)
-- Entered into a Memorandum of Understanding with SLB (formerly
Schlumberger) for the exclusive provision of drilling and
completion services and equipment for the Pilot project
-- Progressed the reprocessing of the Catcher North seismic
survey with TGS and started quantitative interpretation work
-- Prepared 33(rd) Round applications (submitted 12 January
2023) which included a 114 bcf gas discovery and a 153 bcf near
drill-ready prospect.
-- Identified two new low-risk exploration prospects with P50
prospective resources of 120 MMbbl and 70 MMbbl (management
estimates, after the reporting period)
-- Since the end of the period under review, initial agreement
reached with Rapid for the disposal of the Crinan and Dandy
discoveries; and
-- Raised GBP500k before expenses on February 1 2023
Steve Brown, Orcadian's CEO, commented:
"The second half of 2022 was dominated by political and fiscal
turmoil. We all hope for calmer waters in 2023. Our absolute focus
is to find a farm-in partner or a new owner for Pilot and our
intention is to elicit offers during 2Q and 3Q of 2023 so that a
new operator can take the project forward; a project which will
help deliver a secure transition for the UKCS.
"We are in active discussions with potential new investors as
Orcadian needs additional working capital to secure the best deal
for shareholders on Pilot.
"Those discussions have been buoyed by the identification of two
new prospects on our licences which have been illuminated by the
quantitative interpretation work done for us by TGS. These
prospects are likely to contain a lighter oil than seen on Pilot
and have a very high chance of success as well as a relatively low
cost to drill. We will update shareholders on these discussions as
soon as possible."
For further information on the Company please visit the
Company's website: https://orcadian.energy
Contact:
Orcadian Energy plc + 44 20 7920 3150
Steve Brown, CEO
Alan Hume, CFO
WH Ireland (Nomad and Joint Broker) +44 20 7220 1666
Katy Mitchell / Andrew de Andrade (Nomad)
Harry Ansell / Fraser Marshall (Corporate
Broking)
Tavistock (PR) + 44 20 7920 3150
Nick Elwes / Simon Hudson orcadian@tavistock.co.uk
Qualified Person's Statement
Pursuant to the requirements of the AIM Rules and in particular,
the AIM Note for Mining and Oil and Gas Companies, Maurice Bamford
has reviewed and approved the technical information and resource
reporting contained in this announcement. Maurice has more than 33
years' experience in the oil & gas industry and 3 years in
academia. He holds a BSc in Geology from Queens University Belfast
and a PhD in Geology from the National University of Ireland.
Maurice is a Fellow of the Geological Society, London, and a member
of the Petroleum Exploration Society of Great Britain. He is
Exploration and Geoscience Manager at Orcadian Energy.
About Orcadian Energy
Orcadian is a North Sea focused, low emissions, oil and gas
development company. In planning its Pilot development, Orcadian
has selected wind power to transform oil production into a cleaner
and greener process. The Pilot project is on a timeline for
approval and we anticipate it will be amongst the lowest carbon
emitting oil production facilities in the world, despite being a
viscous crude. Orcadian may be a small operator, but it is also
nimble, and the Directors believe it has grasped opportunities that
have eluded some of the much bigger companies. As we strike a
balance between Net Zero and a sustainable energy supply, Orcadian
intends to play its part to minimise the cost of Net Zero and to
deliver reliable organic energy.
Orcadian Energy (CNS) Ltd ("CNS"), Orcadian's operating
subsidiary, was founded in 2014 and is the sole licensee of P2244,
which contains 78.8 MMbbl of 2P Reserves in the Pilot discovery,
and of P2320 and P2482, which contain a further 77.8 MMbbl of 2C
Contingent Resources in the Elke, Narwhal and Blakeney discoveries
(as audited by Sproule, see the CPR in the Company's Admission
Document for more details). Within these licences there are also
191 MMbbl of unrisked Prospective Resources. These licences are in
blocks 21/27, 21/28, 28/2 and 28/3, and lie 150 kms due East of
Aberdeen. The Company also has a 50% working interest in P2516,
which contains the Fynn discoveries. P2516 is administered by the
Parkmead Group and covers blocks 14/20g and 15/16g, which lie
midway between the Piper and Claymore fields, 180 kms due East of
Wick.
Pilot, which is the largest oilfield in Orcadian's portfolio,
was discovered by Fina in 1989 and has been well appraised. In
total five wells and two sidetracks were drilled on Pilot,
including a relatively short horizontal well which produced over
1,800 bbls/day on test. Orcadian's proposed low emissions, field
development plan for Pilot is based upon a Floating Production
Storage and Offloading vessel (FPSO), with over thirty wells to be
drilled by a Jack-up rig through a pair of well head platforms and
provision of power from a floating wind turbine.
Emissions per barrel produced are expected to be about a tenth
of the 2021 North Sea average, and less than half of the lowest
emitting oil facility currently operating on the UKCS. On a global
basis this places the Pilot field emissions at the low end of the
lowest 5% of global oil production.
Chairman & CEO's Statement
The second half of 2022 was an extraordinary time in British
politics. The turbulence caused by the unseating of Boris Johnson,
followed rapidly by the defenestration of Liz Truss, and the
installation of Rishi Sunak had an immense impact on the energy
industry. In short, that political and fiscal turmoil ensured that
2022 was a year in which many oil companies chose not to commit to
new projects.
We are optimistic that 2023 will be different, and will be the
year that the UK government, and opposition alike, realise the
vital role that the UK's oil and gas industry has to play in
delivering a secure transition. The UK government's and Climate
Change Committee's forecasts of oil and gas demand rely on the UK
importing that energy from overseas. Exporting emissions and
stifling the development of low-carbon production technologies
seems entirely counterproductive to rational climate goals. The
Company's flagship project Pilot has the potential to be a
leading-edge, low-carbon development and we estimate emissions can
be as low as 2.6 kgCO(2e) /bbl, against a North Sea average of 25
kgCO(2e) /bbl.
The UK oil and gas industry can lead a transformation in how
offshore oil and gas is produced so that global emissions from the
production process are driven down. the people in the oil and gas
sector have the skills, energy, and enthusiasm to do this and to
make the UK a leader in using wind power to power the North Sea.
The establishment of the Department for Energy Security and Net
Zero will, we hope, deliver the right focus on a secure transition
that will actually reduce, rather than displace, global emissions,
boost domestic energy production and deliver good jobs.
We were initially encouraged by the structure of the Energy
Profits Levy ("EPL") as it had clearly, and cleverly, been designed
to be both temporary and to encourage upstream investments. The
second incarnation of EPL has continued that encouragement to
invest and the inclusion of a decarbonisation allowance is very
supportive of our plans to deploy a floating wind turbine to
provide the bulk of the electrical power the Pilot development
needs.
The structure of the windfall tax is significantly advantageous
to companies that are already producing and paying taxes in the UK
Continental Shelf. For example, a producing company's financial
exposure is just 25% of the capital cost to first oil on a new
prospect or development, whilst for a non-producing company the
exposure is 100% of the capital cost [1] . The impact on Orcadian
is clear, we will focus on attracting UK producing and tax paying
companies as partners in, or new owners for, the Pilot development.
We do have another approach to financing the development, which is
to find investors willing to furnish the required facilities in
return for a tariff or day rate. This infrastructure financing
arrangement could create a very attractive project for investors,
and we are now preparing to engage with specific funding and
contracting parties based in the Middle East.
We are working hard on both strategies. We are committed to
seeing the Pilot project developed and we will do everything in our
power to chart a path forward for the very significant resource we
have under licence.
Management's estimated resource for the Pilot reservoir grew by
over 18% in the reporting period. This was largely down to an
increase in the mapped oil-in-place which emerged as we interpreted
the newly reprocessed seismic which we had licensed from TGS in
June 2022. Part of the resource upgrade was also founded upon the
reservoir modelling work we did which has given us an excellent
understanding of how polymer flood works on a field like Pilot.
However, we do not rely solely upon reservoir models, we are
constantly reviewing the performance of analogue fields and we have
been massively encouraged by the success enjoyed by Ithaca on
Captain in the North Sea, Hilcorp on the Milne Point project in
Alaska and CNRL on the Britnell/Pelican Lake project in Alberta.
Every projection we make for production performance is benchmarked
against the performance of these projects. Our production forecasts
are typically more conservative than the actual results from these
analogues.
The Captain reservoir, operated by Ithaca, is the field most
like Pilot. Both are offshore, lying about 3000' below the sea, are
cool at 31 C, have excellent and similar porosity, permeability and
net to gross characteristics. The Pilot oil is somewhat more
viscous than Captain, but the projects at Milne Point and Pelican
Lake are successful with oil viscosities both similar to and
substantially higher than we see in Pilot. The Captain polymer
flood project has blazed a trail for the Pilot development. Ithaca,
and Chevron before them, have solved the technical and logistical
challenges of implementing an offshore polymer flood and we follow
everything they report avidly.
In February 2023 we attended and presented at a polymer
conference hosted by SNF in Aberdeen and we were delighted to hear
that Ithaca were enjoying "consistent success across the Captain
reservoir development". We remain convinced that polymer flooding
is the right solution for developing viscous oil on the UKCS, and
we believe it is one of few opportunities for the industry to
maintain production given that about 8 billion barrels of
discovered viscous oil in place remains undeveloped. Encouraging
polymer floods of these viscous oil discoveries should be a key
plank of the UK government's energy security strategy.
The prize on the Pilot development has been confirmed and
enhanced by the technical work we did in 2022. 2023 is the year we
need to deliver this project into new tax advantaged hands.
The work we have done with TGS has been revelatory and has far
exceeded our internal expectations. When we licensed over 2,000
km(2) of the best quality data available in the area, and asked TGS
to reprocess both the Catcher North and Catcher surveys, we had
high hopes that we would get encouragement that Carra and Bowhead
would be drillable targets and that we could farm these prospects
out.
TGS has employed a seismic attribute analysis, which they have
been developing over recent years, that can distinguish lithology
and fluid fill when certain conditions are met. Being able to
identify fluid fill with a high degree of certainty is the Holy
Grail of seismic interpretation. The TGS technique was originally
designed for use in frontier basins that lack significant well
coverage, since it did not require any local well information. In
extensively drilled areas, such as on Orcadian's Western Platform
acreage, this is equally beneficial, but in a different way. Actual
well results can be used to check the predictive ability of the
technique and give statistically based guidance to the geological
chance of success.
Where we have mapped the Tay play (the fairway that we are
focussed on) with the new seismic attribute, twenty-seven out of
twenty-seven reservoir penetrations were correctly predicted by the
attribute, across changing geological conditions. We see this as
highly significant especially since the technique was not
conditioned with local well data.
Work is currently ongoing, but the results to date have
completely reshaped and reinvigorated our exploration strategy for
the area. We have now identified two exciting and deeper prospects,
each likely to contain a significantly less viscous oil than in
Pilot. Based on preliminary mapping, one has a P50 prospective
resource of 120 MMbbl, the other 70 MMbbl. Additional geophysical
modelling work has also explained why these prospects had not been
high-graded with the previously used seismic attributes.
We have requested from NSTA, a further extension to Phase A of
the P2320 licence, which contains Feugh and Bowhead, to provide
additional time to secure a well commitment on the licence (see the
Company's announcement dated 22 March 2022 for more details on this
licence).
The attribute that TGS has mapped for us over our Tay play
fairway is called relative Extended Elastic Impedance, or rEEI for
short. For the more technically minded of you we recommend the
paper " Practical application of global siliciclastic rock property
trends to AVA interpretation in frontier basins " by Dave Went, of
TGS. (Link:
https://www.tgs.com/articles/global-siliciclastic-rock-property-to-ava-interpretation
)
We illustrate the results we have seen with the map below. This
is an image of the rEEI response over the Pilot reservoir with our
proposed drilling envelope superimposed. This outline shows where
we intend to place both production and injection wells and predated
the rEEI attribute analysis.
Image reproduced with the kind permission of TGS
Gas caps are easy to spot; gas filled sand creates a high
amplitude response and is obvious on virtually any seismic
attribute. This is just as true for rEEI and the orange-red
response clearly identifies the gas cap in the east of Pilot itself
as well as a number of small four-way dip closed structures to the
east of Pilot, including the Harbour discovery, well 21/27-1A.
Shales and brine filled sands both show up as dark blue on this
display as they are difficult to distinguish, one from the other,
with the rEEI technique at shallow depths. Oil filled sands show up
as cyan with a brown/orange speckle. The conformity of the
seismically predicted oil-bearing sands with our previous
structurally based interpretation is extraordinary. The channels
which feed sand into the Pilot field are crystal clear and the path
taken by the channel which separates Pilot Main from Pilot South is
consistent with the model we had developed to explain the almost 90
feet difference in oil water contacts between Pilot Main and Pilot
South. Previously we could not image the cause of the barrier
between the two pools.
We are of course committed to finding a development or financing
partner for Pilot and success in farming out the Pilot project
would be transformational for the Company, but to add to that we
have uncovered a significant prospective resource with a very high
geological chance of success right on our own doorstep.
Whilst the Company is considering all options at this stage, any
disposal of Licence P2244 and the Pilot project would likely be a
fundamental disposal pursuant to Rule 15 of the AIM Rules for
companies. Such a disposal would therefore be conditional on the
consent of shareholders; and require both an announcement and the
publication of a shareholder circular detailing the potential
disposal. Further announcements will be made in due course if this
option is pursued by the Company.
Clearly, and as we noted when we completed a small fundraise at
the beginning of February, the Company needs to raise additional
funds in the near term for working capital and also to repay the
loan facility with Shell of c. GBP1m which is due to be repaid in
August 2023. We can confirm we are in active discussions with a
number of financing counterparties in respect of that requirement,
and the addition of this exciting exploration strategy will be very
helpful to our success in those financing discussions. We will also
update shareholders as these discussions progress.
Finally, I would also like to take this opportunity to thank all
our shareholders for their continued support and look forward to
providing further updates as appropriate on what we believe will be
a key year for the Company and the development of Pilot.
Joe Darby Steve Brown
Chairman CEO
29 March 2023 29 March 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE SIX MONTHSED 31 DECEMBER 2022
Unaudited Unaudited Audited
6 Month 6 Month 12 Month
Period Ended Period Ended Period Ended
31 December 31 December 30 June
2022 2021 2022
Note GBP GBP GBP
Administrative expenses (455,196) (519,650) (1,694,576)
Operating Loss (455,196) (519,650) (1,694,576)
------------- ------------- -------------
Finance costs (36,493) (19,277) (41,869)
Other income 2,187 - 466,667
Listing costs - (325,449) (316,949)
------------- ------------- -------------
Loss before tax (489,503) (864,376) (1,586,727)
Taxation - - -
Loss for the period (489,503) (864,376) (1,586,727)
------------- ------------- -------------
Other comprehensive income:
Items that will or may be
reclassified to profit or
loss:
Other comprehensive income - - -
------------- ------------- -------------
Total comprehensive income (489,503) (864,376) (1,586,727)
------------- ------------- -------------
Basic and Diluted Earnings
per share 4 (0.74p) (1.38p) (2.51p)
All operations are continuing.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
Unaudited Unaudited Audited
as at as at as at
31 December 31 December 30 June
2022 2021 2021
Note GBP GBP GBP
Non-current assets
Property, plant and equipment 3,264 1,842 3,414
Intangible assets 5 3,768,546 2,694,666 3,303,400
3,771,810 2,696,508 3,306,814
------------ ------------ -----------
Current assets
Trade and Other Receivables 6 58,689 63,217 1,055,829
Cash and cash equivalents 225,446 1,517,902 271,439
284,135 1,581,119 1,327,268
------------ ------------ -----------
Total assets 4,055,945 4,277,627 4,634,082
------------ ------------ -----------
Non-current liabilities
Borrowings 7 - (815,185) (956,184)
- (815,185) (956,184)
------------ ------------ -----------
Current liabilities
Trade and Other Payables 8 (428,381) (516,902) (553,509)
Borrowings 7 (992,678) - -
(1,421,059) (516,902) (553,509)
------------ ------------ -----------
Total liabilities (1,421,059) (1,332,087) (1,509,693)
------------ ------------ -----------
Net assets 2,634,886 2,945,540 3,124,389
------------ ------------ -----------
Equity
Ordinary share capital 9 66,612 63,755 63,755
Share premium 9 4,788,432 3,890,089 3,890,089
Share warrants reserve 9 15,000 15,000 15,000
Shares to be issued 9 - - 901,200
Reverse Acquisition Reserve 3 (38,848) (38,848) (38,848)
Retained earnings (2,196,310) (984,456) (1,706,807)
------------ ------------ -----------
Total equity 2,634,886 2,945,540 3,124,389
------------ ------------ -----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIODED 31 DECEMBER 2022
Ordinary Share Reverse
Share warrants Shares Acquisition Retained
capital Share premium reserve to be issued Reserve earnings Total
Note GBP GBP GBP GBP GBP GBP GBP
Balance as at 1 July
2021 (audited) 52,202 - - - (38,848) (120,080) (106,726)
Loss for the period
and total
comprehensive
income - - - - - (864,376) (864,376)
-------- ------------- --------- -------------- ------------ ----------- ---------
Issue of shares 9 7,625 3,042,375 - - - - 3,050,000
Share issue costs 9 - (233,358) - - - - (233,358)
Conversion of loans 9 3,928 1,096,072 - - - - 1,100,000
Issue of warrants 9 - (15,000) 15,000 - - - -
-------- ------------- --------- -------------- ------------ ----------- ---------
Balance as at 31
December 2021
(unaudited) 63,755 3,890,089 15,000 - (38,848) (984,456) 2,945,540
-------- ------------- --------- -------------- ------------ ----------- ---------
Loss for the period
and total
comprehensive
income - - - - - (722,351) (722,351)
-------- ------------- --------- -------------- ------------ ----------- ---------
Shares to be issued 9 - - - 901,200 - - 901,200
-------- ------------- --------- -------------- ------------ ----------- ---------
Balance as at 30 June
2022 (audited) 63,755 3,890,089 15,000 901,200 (38,848) (1,706,807) 3,124,389
-------- ------------- --------- -------------- ------------ ----------- ---------
Loss for the period
and total
comprehensive
income - - - - - (489,503) (489,503)
-------- ------------- --------- -------------- ------------ ----------- ---------
Issue of shares 9 2,857 997,143 - (1,000,000) - - 1,000,000
Share issue costs 9 - (98,800) - 98,800 - - -
Balance as at 31
December 2022
(unaudited) 66,612 4,788,432 15,000 - (38,848) (2,196,310) 2,634,886
-------- ------------- --------- -------------- ------------ ----------- ---------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIODED 31 DECEMBER 2022
Unaudited Unaudited Audited
6 Month Period 6 Month Period 12 Month
Ended Ended Period Ended
31 December 31 December 30 June
2022 2021 2022
Note GBP GBP GBP
Cash flows from operating activities
Loss before tax for the year (489,503) (864,376) (1,586,727)
Adjustments for:
Depreciation 150 - 674
Unrealised foreign exchange loss
(gain) - 33,222 151,629
(Increase) / decrease) in trade
and other receivables 6 (2,859) 25,331 32,720
(Decrease) / Increase in trade
and other payables 8 (60,714) (24,928) 36,000
Finance costs in the period 36,493 19,277 41,869
--------------- --------------- -------------
Net cash flows from operating
activities (516,433) (811,474) (1,323,836)
--------------- --------------- -------------
Investing activities
Purchases of property, plant and
equipment - - (2,246)
Purchases of exploration and evaluation
assets 5 (430,760) (666,822) (1,348,677)
--------------- --------------- -------------
Net cash used in investing activities (430,760) (666,822) (1,350,677)
--------------- --------------- -------------
Financing activities
Proceeds from issue of ordinary
share capital 9 1,000,000 3,000,000 3,000,000
Share issue costs paid 9 (98,800) (183,358) (233,358)
Net cash used in financing activities 901,200 2,816,642 2,766,642
--------------- --------------- -------------
Net (decrease) / increase in cash
and cash equivalents (45,993) 1,338,346 91,883
Cash and cash equivalents at beginning
of period 271,439 179,556 179,556
--------------- --------------- -------------
Cash and cash equivalents and
end of period 225,446 1,517,902 271,439
--------------- --------------- -------------
Significant non-cash transactions:
There were no significant non-cash transactions during the
period.
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
Orcadian Energy PLC (the "Company") is a public limited company
which is domiciled and incorporated in England and Wales under the
Companies Act 2006 with the registered number 13298968. The
Company's registered office is 6(th) floor, 60 Gracechurch Street,
London, EC3V 0HR, and it ordinary shares are admitted to trading on
AIM, a market of the London Stock Exchange.
The principal activity of the Group is managing oil and gas
assets and the Group holds a 100% interest in, and is licence
administrator for, UKCS Seaward Licences P2244, which contains the
Pilot and Harbour heavy oil discoveries, P2320, which contains the
Blakeney, Feugh, Dandy & Crinan discoveries and P2482 which
contains the Elke and Narwhal discoveries. The Group also has a 50%
working interest in P2516, which contains the Fynn discoveries.
P2516 is administered by the Parkmead Group and covers blocks
14/20g and 15/16g, which lie midway between the Piper and Claymore
fields.
2. Summary of significant accounting policies
The principal accounting principles applied in the preparation
of these financial statements are set out below. These principles
have been consistently applied to all years presented, unless
otherwise stated.
2.1. Basis of preparation
The interim financial information set out above does not
constitute statutory accounts within the meaning of the Companies
Act 2006. It has been prepared on a going concern basis in
accordance with UK-adopted international accounting standards.
Statutory financial statements for the year ended 30 June 2022 were
approved by the Board of Directors on 15 December 2022 and
delivered to the Registrar of Companies. The report of the auditors
on those financial statements was unqualified.
The interim financial information for the six months ended 31
December 2022 has not been reviewed or audited. The interim
financial report has been approved by the Board on 28 March
2023.
2.2. Going concern
The financial statements have been prepared on a going concern
basis. The Group is not yet revenue generating and an operating
loss has been reported. The Group has historically been reliant on
raising finance, both debt and equity, to enable it to meet its
obligations as they fall due.
The Directors have reviewed a detailed forecast based on the
funds expected to be raised and forecasted expenditure, including
all required spend to meet licence requirements. This forecast has
been stress tested by management in reaching their going concern
conclusion. Having made due and careful enquiry, the Directors
acknowledge that funds will need to be raised within the next 12
months to enable the Group to meets its obligations as they fall
due, however, the Directors are confident that the required funds
will successfully be raised through the equity market to funds its
operations over the next 12 months.
The Directors, therefore, have made an informed judgement, at
the time of approving financial statements, that the Group is a
going concern but they acknowledge that the dependence on raising
further funds during the next 12 months represents a material
uncertainty.
2.3. Risks and uncertainties
The Board continuously assesses and monitors the key risks of
the business. The key risks that could affect the Company's medium
term performance and the factors that mitigate those risks have not
substantially changed from those set out in the Company's 2022
Annual Report and Financial Statements, a copy of which is
available on the Company's website: https://orcadian.energy. The
key financial risks are securing finance for the Pilot project and
an emerging cost inflation risk.
2.4. Critical accounting estimates
The preparation of interim financial statements requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the end of the
reporting period. Significant items subject to such estimates are
set out in note 3 of the Company's 2022 Annual Report and Financial
Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 30 June 2022, as
described in those annual financial statements.
3. Group reorganisation under common control
The acquisition in the year ended 30 June 2021 met the
definition of a group reorganisation due to the Company and the
subsidiary being under common control at the date of acquisition.
As a result, and since Orcadian Energy Plc did not meet the
definition of a business per IFRS 3, the acquisition fell outside
of the scope of IFRS 3 and the predecessor value method was used to
account for the acquisition.
These consolidated financial statements for the period ended 31
December 2022 are of the Company's wholly owned subsidiary,
Orcadian Energy (CNS) Ltd.
On 11 May 2021, the Company issued 52,201,601 shares to acquire
the entire issued share capital of Orcadian Energy (CNS) Ltd.
The net assets of Orcadian Energy (CNS) Ltd at the date of
acquisition was as follows:
GBP
Property Plant & Equipment 1,357
Intangible Assets 1,719,292
Current Assets 447,425
Current Liabilities (284,745)
Non-Current Liabilities (1,869,975)
---------------------------- ------------
Net assets 13,354
---------------------------- ------------
The reserve that arose from the acquisition is made up as
follows:
GBP
---------------------------------------------------- ---------
As at 31 December 2020 -
Cost of the investment in Orcadian Energy (CNS)
Ltd 52,202
Less: net assets of Orcadian Energy (CNS) Ltd
at acquisition (13,354)
As at 30 June 2021 (audited) and as at 31 December
2021 (unaudited) 38,848
---------------------------------------------------- ---------
4. Earnings per share
The calculation of the basic and diluted earnings per share is
calculated by dividing the loss for the year for continuing
operations for the Company by the weighted average number of
ordinary shares in issue during the year.
Dilutive loss per Ordinary Share equals basic loss per Ordinary
Share as, due to the losses incurred in all three periods
presented, there is no dilutive effect from the subsisting share
warrants.
Unaudited Unaudited Audited
6 Month Period 6 Month Period 12 Month
Ended Ended Period Ended
31 December 31 December 30 June
2022 2021 2021
GBP GBP GBP
Loss for the purposes of basic
earnings per share being net
loss attributable to the owners (489,503) (864,376) (1,586,727)
Weighted average number of Ordinary
Shares 66,519,149 62,809,231 63,278,315
Loss per share (0.74p) (1.38p) (2.51p)
------------------------------------- ---------------- ---------------- --------------
The weighted average number of shares is adjusted for the impact
of the acquisition as follows:
5. Intangible assets
Oil and gas
exploration
assets
GBP
Cost
------------
As at 30 June 2021 (audited) 1,814,615
------------
Additions 880,051
------------
As at 31 December 2021 (unaudited) 2,694,666
------------
Additions 608,734
------------
As at 30 June 2022 (audited) 3,303,400
------------
Additions 465,146
------------
As at 31 December 2022 (Unaudited) 3,768,546
------------
6. Trade and other receivables
Unaudited Unaudited Audited
as at as at as at
31 December 31 December 30 June
Group 2022 2021 2022
GBP GBP GBP
VAT receivable 55,188 63,217 55,829
Other receivables 3,500 - 1,000,000
58,688 63,217 1,055,829
------------ ------------ ---------
7. Borrowings
Unaudited Unaudited Audited
as at as at as at
31 December 31 December 30 June
2022 2021 2022
GBP GBP GBP
STASCO Loan 992,678 815,185 956,184
992,678 815,185 956,184
------------- ------------- ---------
Current liabilities 992,678 - -
------------- ------------- ---------
Non-current liabilities - 815,185 956,184
8. Trade and other payables - due within one year
Unaudited Unaudited Audited
as at as at as at
31 December 31 December 30 June
2022 2021 2022
GBP GBP GBP
Trade payables 177,849 294,918 184,636
Accruals 250,532 191,049 334,631
Other creditor - 30,935 34,242
------------ ------------ --------
428,381 516,902 553,509
------------ ------------ --------
9. Ordinary share capital and share premium
Group
Number of Ordinary Share
shares share capital premium
Issued GBP GBP
As at 30 June 2021 (audited) 52,201,602 52,202 -
Issue of shares 7,625,000 7,625 3,042,375
Share issue costs - - (233,358)
Conversion of loans 3,928,572 3,928 1,096,072
----------- -------------- ----------
As at 31 December 2021 (unaudited) 63,755,174 63,755 3,905,089
----------- -------------- ----------
As at 30 June 2022 (audited) 63,755,174 63,755 3,890,089
----------- -------------- ----------
Issue of shares 2,857,143 2,857 997,143
Share issue costs - - (98,800)
As at 31 December 2022 (unaudited) 66,612,317 66,612 4,788,432
----------- -------------- ----------
On 6 July 2022, the Company issued 2,857,143 ordinary shares of
the Company at 35 pence each. At 30 June 2022, these shares were
recorded on the statement of financial position as Shares to be
issued. The value of the Shares to be issued reserve reflected the
gross proceeds of the share placement of GBP1,000,000, less
GBP98,800 of accrued share issue costs. Upon completion on 6 July
2022 the net value of Shares to be issued was re-allocated to Share
capital and Share premium.
On 15 July 2021 the Company placed 7,500,000 New Ordinary Shares
("the Raise") at 40p each to raise gross proceeds of GBP3,000,000,
and also issued 125,000 new shares at 40p each to a supplier in
part payment of an outstanding bill.
On 15 July 2021 all Convertible Loan Notes ("CLNs") were
converted in to ordinary shares at a price of 28 pence each. In
total 3,928,572 ordinary shares were issued in full discharge of
the CLNs.
The ordinary shares confer the right to vote at general meetings
of the Company, to a repayment of capital in the event of
liquidation or winding up and certain other rights as set out in
the Company's articles of association.
On 15 July 2021 the Company issued 75,000 warrants over ordinary
shares of the Company at 40 pence each, exercisable at any time
over a three year period from the date of issue. The warrants were
valued using the Black-Scholes pricing model. The inputs into the
Black-Scholes model are as follows:
Grant date 15 July 2021
Exercise price 40.00 pence
Expected life 3 years
Expected volatility 77.32%
Risk free rate of
interest 0.0242%
Dividend yield Nil
Fair value of option 20.00 pence
---------------------- -------------
Volatility has been estimated based on the historic volatility
of a collection of comparable companies over a period equal to the
expected term from the grant date.
10. Events after the reporting period
Since 31 December 2022, the Company has been focussed on the
following activities:
-- Identification of two new prospects with P50 prospective
resources of 120 MMbbl and 70 MMbbl (management estimates);
-- Increase in P50 technically recoverable resources at the
Pilot field to 97 MMbbl (management estimates);
-- Signing of a non-binding heads of terms for the disposal of
non-core projects Crinan and Dandy;
-- Lodged three licence applications in the 33(rd) Offshore licencing round;
-- Completion of share placement raising GBP500,000 before costs
through the issue of 5 million ordinary shares at 10 pence per
share.
[1] More information on the UK Government's windfall tax scheme
can be found here:
https://www.gov.uk/government/publications/autumn-statement-2022-energy-taxes-factsheet/energy-taxes-factsheet
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END
IR KZGZFNLKGFZM
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