TIDMSLE
RNS Number : 2476P
San Leon Energy PLC
30 September 2011
Friday 30 September 2011
San Leon Energy Plc
Interim Results for the six months ended 30(th) June 2011
San Leon Energy Plc ("San Leon"), the AIM-traded oil and gas
exploration and development Company focusing on projects in Poland,
Morocco, Albania and the Atlantic Margin, is today pleased to
announce its interim financials for the six months to end June
2011.
Operational Highlights
We have had a very active first half in preparation for our
forward exploration programme:
-- Poland:
- completion of the drilling and evaluation of the exploration
well in the Nida Concession in September;
- completion of the 2D seismic programme over the Gdansk W,
Braniewo and Szczawno Concessions in June;
- interpretation and prospect evaluation is ongoing of the
Szczecinek Block 106;
- completion by Acoustic Geophysical of 165 km(2) of 3D seismic
on the Company's 100% owned Nowa Sol Concession; and
- work is ongoing in the Carboniferous shale play across the
Wschowa, Gora, Winsko and Rawicz Concessions (San Leon 100%).
-- Ireland:
- San Leon completed a 250 km(2) 3D seismic survey on the North
Porcupine Licence (FEL 1/04) in May 2011.
-- Albania:
- the 840 km(2) Durresi Block 3D seismic acquisition survey was
completed in April 2011. The data is currently being processed by
Western Geophysical in London, who are expected to deliver the
final processed data in early Q4 2011.
-- Morocco:
- Novaseis has completed the 600km of seismic on the Tarfaya
Licence and is now commencing acquiring 600km of seismic on the Zag
licence.
Outlook for next 6 months
Poland
We are currently drilling both our unconventional shale gas and
conventional oil plays in Poland and continuing with our strategy
of trying to deliver near term cash flow through low cost
exploration targeting shallow, oil plays whilst concurrently
drilling the high impact and step-change value prospects in the
Baltic and Carboniferous Basins.
We announced on 29 September 2011 the spudding of our first of
three back to back wells in the Baltic Basin with Talisman Energy
and are looking forward to the results.
The drilling location for our first Carboniferous unconventional
gas well is currently being prepared in anticipation of spudding a
well in the next month. A second well is also planned in late 2011
to early 2012 to extend the play fairway.
The first ever horizontal results in the Baltic basin have
recently been announced by 3Legs Resources who reported sustained
gas flows from multiple potential zones. The results from this
first horizontal will lead to a decreased learning curve and we
believe that the knowledge of this well and future wells will lead
to significant gas production in Poland in the future. We have seen
nothing to date that has indicated that this play will not work and
in fact continue to get excited about the potential for big
production in the coming years.
There will be a significant ramp-up in operational activity from
other operators in Poland and this should lead to further derisking
of the acreage and better understanding of the large upside
potential of the play.
Realm acquisition
We are also delighted to have agreed terms to acquire Realm
Energy International Corporation ("Realm") which will add a further
464,919 acres leaving us with 1.7m net acres in our core areas of
Poland in these very exciting plays. We look forward to a
completion of the acquisition at the beginning of November. In
addition, Realm's recent award of 1.72m net acres in Spain provides
us with new shale gas potential for future exploration making San
Leon one of the leading shale gas land holders in Europe.
Albania
Final processing of the 840km(2) of 3D seismic survey that we
shot in April 2011 is expected during October this year and the
operational programme following this will be decided following a
thorough analysis of this data.
Ireland
We are currently seeking farm-in partners for the Slyne licence
and have opened a data room to facilitate this process. Several
companies are reviewing data and we will update the market as
appropriate.
Processing of the recently acquired3D seismic survey over the
C1/Conemara area is near completion and in Barryroe we are also
awaiting final processed volumes very soon.
Morocco
The Novafor Rig is currently on the Tarfaya Well A location in
preparation to run an injection and frac tests of the oil shale.
The test will be monitored with Microseismic to determine fracture
pattern. Once the test is complete we will drill Tarfaya Well C and
core. We will then start our injection process between the three
wells. This should take place at the end of a three weeks.
Financial Review
San Leon made a profit before tax of EUR1.48m for the six months
to 30 June 2011, compared to a loss of EUR1.7m in the six months to
30 June 2010. The earnings per share for the period were 0.19 cents
(H1 2010: loss per share of 0.49 cents).
Administrative expenses have been reduced to EUR1.74m from
EUR2.4m in the corresponding period last year. This reduction
includes the effect of acquisition costs of Island Oil and Gas Plc
of EUR480,000 incurred in the 2010 period.
Other income of EUR3.49m is in relation to the payment received
from OMV when the latter relinquished their interest in the Rockall
licence, Offshore Ireland in March 2011. Other income in 2010 of
EUR1.5m related to amounts received from Talisman Energy on the
Baltic Basin licence farm out agreement.
Finance costs for the six months were EUR679,000 compared to
EUR409,925 in the comparative period. This increase is primarily
due to interest on the Delta Hydrocarbons BV loan which is included
in the results for the full six months to 30 June 2011, interest
charges on other loans have decreased as a result of planned debt
repayments from the proceeds of the December 2010 equity
placing.
Cash and cash equivalents as at 30 June 2011 amounted to
EUR42.2m.
Oisin Fanning, Chairman of San Leon said:
"No single well result in Poland or any analysis of data across
a number of our assets has changed our view. In fact very much the
opposite; in both Poland and elsewhere we are more convinced than
ever that San Leon is on the cusp of proving what the Board has
always believed that our assets are world class.
Whilst we are in very difficult macro-economic and market
conditions we are still well placed to deliver results for our
shareholders as we have both the team and the funding in place and
are at that all important inflexion point of creating value through
the drill bit.
We thank you for your continued support."
For further information contact:
San Leon Energy Plc Tel: + 353 1291
6292
Oisin Fanning, Executive Chairman
Dr John Buggenhagen, Exploration
Director
Macquarie Capital (Europe) Limited Tel: +44 (0) 20
3037 2000
Paul Connolly Tel: +44 (0) 20
Ben Colegrave 7012 2000
John Dwyer
Arbuthnot Securities
Antonio Bossi
Richard Johnson
College Hill Associates Tel: +44 (0) 20
7457 2020
Nick Elwes
The interim results are available from the Group's website
www.sanleonenergy.com
Qualified person
John Buggenhagen, who has reviewed this update, has over 15
years experience in the oil & gas industry. He has a Ph.D. and
M.Sc. in Geophysics from the University of Wyoming and a B.Sc. in
Geophysics from the University of Arizona. He is currently the
Director of Exploration for the San Leon Energy Group and based in
San Leon's Warsaw office in Poland.
The following financial information on San Leon Energy Plc
represents the Group's interim results for the 6 months ended 30
June 2011.
Consolidated Income Statement
For the six months ended 30 June 2011
Un-audited Un-audited Audited
Notes 30/06/11 30/06/10 31/12/10
EUR EUR EUR
Revenue 517,649 131,163 592,047
Cost of sales (269,076) (490,720) (447,750)
------------ ------------ ------------
Gross Profit / (Loss) 248,573 (359,557) 144,297
Administrative Expenses (1,743,858) (2,434,231) (4,215,347)
Other income 2 3,492,434 1,500,000 1,501,100
------------ ------------ ------------
Operating profit/(loss) 1,997,149 (1,293,788) (2,569,950)
Finance expense (679,238) (409,925) (1,414,193)
Finance income 161,614 3,308 8,825
Profit/(Loss) before income
tax 1,479,525 (1,700,405) (3,975,318)
Income tax - (1,066) (1,057)
------------ ------------ ------------
Profit/(Loss) for the
period 1,479,525 (1,701,471) (3,976,375)
------------ ------------ ------------
Earnings / (Loss) per share
(cent):
Earnings / (Loss) per
ordinary share - basic 0.19c (0.49)c (1.02)c
Earnings / (Loss) per
ordinary share - diluted 0.18c (0.49)c (1.02)c
------------ ------------ ------------
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2011
Un-audited Un-audited Audited
30/06/11 30/06/10 31/12/10
EUR EUR EUR
(Loss) for the period attributable
to equity holders of the parent 1,479,525 (1,701,471) (3,976,375)
Currency translation adjustments 207,606 817,053 382,768
----------- ------------ ------------
Total comprehensive profit/loss
for the period 1,687,131 (884,418) (3,593,607)
----------- ------------ ------------
As at 30 June 2011
Notes Un-audited Un-audited Audited
30/06/11 30/06/10 31/12/10
EUR EUR EUR
Assets
Non-current assets
Intangible Assets 3 88,578,445 67,958,473 76,064,855
Property, plant and
equipment 4 8,761,217 1,363,900 2,398,186
Total non-current assets 97,339,662 69,322,373 78,463,041
------------- ------------- -------------
Current assets
Trade and other
receivables 5 6,573,651 1,097,175 1,593,592
Other financial assets 6 1,379,193 1,654,619 1,491,802
Cash and cash
equivalents 42,213,207 485,416 67,168,659
------------- ------------- -------------
50,166,051 3,237,210 70,254,053
------------- ------------- -------------
Total assets 147,505,713 72,559,583 148,717,094
Equity and Liabilities
Capital and Reserves
Called up Share Capital 10 39,561,576 20,150,474 39,099,780
Share premium account 10 91,655,978 37,224,020 91,589,215
Share based payment
reserve 2,984,440 2,321,035 3,417,145
Currency translation
reserve 590,374 817,053 382,768
Retained loss (11,034,580) (11,024,836) (13,262,316)
-------------
Total equity
attributable to equity
Holders of the Company 123,757,788 49,487,746 121,226,592
------------- ------------- -------------
Non-Current Liabilities
Provisions 5,345,211 4,666,428 5,345,211
Other loans 9 4,055,984 13,073,643 7,886,287
------------- ------------- -------------
9,401,195 17,740,071 13,231,498
------------- ------------- -------------
Current Liabilities
Loans and borrowings 8 4,922,082 718,546 8,499,487
Trade and other payables 7 9,424,648 4,613,220 5,759,517
------------- ------------- -------------
14,346,730 5,331,766 14,259,004
------------- ------------- -------------
Total Liabilities 23,747,925 23,071,837 27,490,502
------------- ------------- -------------
Total Equity and
Liabilities 147,505,713 72,559,583 148,717,094
------------- ------------- -------------
Consolidated Statement of Changes in Equity
As at 30 June 2011
Share
Share based Currency
Share premium payment translation Retained Total
Capital account reserve reserve earnings Equity
2010 EUR EUR EUR EUR EUR EUR
Balance at 1
Jan 2010 16,059,196 23,976,523 2,321,035 - (9,323,365) 33,033,389
----------- ----------- ---------- ------------ ------------- ------------
Total comprehensive income
for year
(Loss) for
the year - - - - (3,976,375) (3,976,375)
Other comprehensive income
Foreign
currency
translation
differences - - - 382,768 - 382,768
----------- ----------- ---------- ------------ ------------- ------------
Total
comprehensive
income for
year - - - 382,768 (3,976,375) (3,593,607)
----------- ----------- ---------- ------------ ------------- ------------
Transactions with owners
recognised directly in
equity
Contributions by and distributions
to owners
Issue of
shares 23,040,584 67,612,692 - - - 90,653,276
Share based
payment - - 1,133,534 - - 1,133,534
Effect of
share options
exercised - - (37,424) - 37,424 -
Total
transactions
with owners 23,040,584 67,612,692 1,096,110 - 37,424 91,786,810
----------- ----------- ---------- ------------ ------------- ------------
Balance at 31
December
2010 39,099,780 91,589,215 3,417,145 382,768 (13,262,316) 121,226,592
----------- ----------- ---------- ------------ ------------- ------------
2011
Balance at 1
January 2011 39,099,780 91,589,215 3,417,145 382,768 (13,262,316) 121,226,592
----------- ----------- ---------- ------------ ------------- ------------
Total comprehensive income
for year
Profit for
year - - - - 1,479,525 1,479,525
Other
comprehensive
income - - - - -
Foreign
currency
translation
differences - - - 207,606 - 207,606
----------- ----------- ---------- ------------ ------------- ------------
Total
comprehensive
income for
period - - - 207,606 1,479,525 1,687,131
----------- ----------- ---------- ------------ ------------- ------------
Transactions with owners
recognised directly in
equity
Contributions by and distributions
to owners
Issue of
shares 461,796 66,763 - - - 528,559
Share-based
payment - - 315,506 - - 315,506
Effect of
share options
exercised - - (748,211) - 748,211 -
----------- ----------- ---------- ------------ ------------- ------------
Total
transactions
with owners 461,796 66,763 (432,705) - 748,211 844,065
----------- ----------- ---------- ------------ ------------- ------------
Balance at 30
June 2011 39,561,576 91,655,978 2,984,440 590,374 (11,034,580) 123,757,788
----------- ----------- ---------- ------------ ------------- ------------
Consolidated Cash Flow Statement
For the six months ended 30 June 2011
Un-audited Un-audited Audited
30/06/11 30/06/10 31/12/10
EUR EUR EUR
Cash flows from operating
activities
(Loss) for the period before
taxation 1,479,525 (1,700,405) (3,975,318)
Finance costs 679,238 422,114 1,414,193
Finance Income (161,614) (3,308) (8,825)
Loss on disposal of property,
plant and equipment - - 5,089
Depletion and depreciation 32,768 388,094 55,316
Foreign Exchange - - (6,624)
Share based payment reserve 85,434 - 428,438
Working capital adjustments
(Increase) / decrease in debtors (4,980,059) (1,725,169) (760,769)
Increase / (Decrease) in creditors 3,665,132 306,981 891,230
------------- ------------ ------------
800,424 (2,311,693) (1,957,270)
Corporation tax - (5,514) (2,870)
------------- ------------ ------------
Net cash flows generated from
/ used in operating activities 800,424 (2,317,207) (1,960,140)
------------- ------------ ------------
Cash flows from investing
activities
Interest Received 161,614 3,308 8,825
Purchases of property, plant and
equipment (6,376,283) (137,109) (2,225,931)
Expenditure on exploration and
evaluation assets (12,324,032) (1,251,900) (7,310,595)
Acquisition of subsidiary, net
cash acquired - 244,092 244,092
------------- ------------ ------------
Net cash used in investing
activities (18,538,701) (1,141,609) (9,283,609)
------------- ------------ ------------
Cash flows from financing
activities
Proceeds from issue of share
capital 528,559 2,265,914 75,140,429
Proceeds from drawdown of other
loans - - 2,343,321
Interest paid (183,538) (273,686) (520,566)
Repayment of convertible loan (2,150,000) (200,000) (600,000)
Repayment of other loans (4,989,151) - -
Net cash generated in financing
activities (6,794,130) 1,792,228 76,363,184
------------- ------------ ------------
Net (decrease) /increase in cash (24,532,407) (1,666,588) 65,119,435
Effect of foreign exchange
fluctuation on cash and cash
equivalents (423,045) 13,916 66,705
Cash and cash equivalents at start
of period 67,168,659 2,138,088 1,982,519
------------- ------------ ------------
Cash and cash equivalents at end
of period 42,213,207 485,416 67,168,659
------------- ------------ ------------
Notes to the Interim Financial Information
1. Basis of preparation and accounting policies
The Group interim financial information has been prepared in
accordance with International Financial Reporting Standards and the
accounting policies adopted are consistent with those followed in
the preparation of the Group's financial statements for the year
ended 31 December 2010.
The interim consolidated financial statements do not include all
the information and disclosures required in the annual financial
statements, and should be read in conjunction with the Group's
annual financial statements as at 31 December 2010 which are
available on the Group's website www.sanleonenergy.com.
The interim consolidated financial statements are presented in
Euro ("EUR").
2. Other income
In January 2011, OMV (Ireland) Killala Exploration GmbH ("OMV")
paid GBP3 million to San Leon after its removal from the Irish
Continental Petroleum Exploration Licence No: 3/05 (the "Rockall
Licence"). OMV assigned its 50% interest in the licence to San Leon
who now hold a 100% interest in this licence.
3. Intangible assets
Exploration
and evaluation Royalty
Cost and net book value assets Interests Total
EUR EUR EUR
At 1 January 2010 35,535,470 943,030 36,478,500
Acquisitions through business
combinations 28,518,530 2,829,090 31,347,620
Additions 7,658,282 778,236 8,436,518
Exchange Rate adjustment 142,918 10,846 153,764
Reclassification from property,
plant and equipment 42,961 - 42,961
Reclassification to other
financial assets (394,508) - (394,508)
---------------- ----------- -----------
At 31 December 2010 71,503,653 4,561,202 76,064,855
Additions 12,534,442 - 12,534,442
Exchange rate adjustment (20,852) - (20,852)
At 30 June 2011 84,017,243 4,561,202 88,578,445
---------------- ----------- -----------
An analysis of exploration assets by geographical area is set
out below:
30/06/2011
EUR
Poland 11,167,262
Morocco 31,548,248
Ireland 33,276,734
Other areas 8,024,999
-----------
Total 84,017,243
-----------
The Directors have considered the licence, exploration and
appraisal costs capitalised in respect of its exploration and
evaluation assets, which are carried at historical cost. Those
assets have been assessed for impairment and in particular with
regard to remaining licence terms, likelihood of licence renewal,
likelihood of further expenditures and on-going appraisals for each
year. The directors are satisfied that there are no current
indications of impairment, but recognise that the future
realisation of these exploration and evaluation assets is dependent
on future successful exploration and appraisal activities and the
subsequent economic production of oil and gas reserves.
4. Property, plant and equipment
Plant & Office Motor
Equipment Equipment vehicles Total
EUR EUR EUR EUR
Cost
At 1 January 2010 - 197,707 25,903 223,610
Additions 2,358,903 21,983 - 2,380,886
Exchange rate adjustment - 640 1,792 2,432
Reclassification to
exploration and evaluation
assets - (111,140) - (111,140)
Disposals (19,197) - (19,197)
At 31 December 2010 2,358,903 89,993 27,695 2,476,591
Additions 6,178,693 143,291 73,960 6,395,944
Exchange rate adjustment - (95) (106) (201)
At 30 June 2011 8,537,596 233,189 101,549 8,872,334
----------- ----------- ---------- ----------
Depreciation
At 1 January 2010 - 104,066 894 104,960
Disposals - (14,108) - (14,108)
Exchange rate adjustment - 387 29 416
Reclassification to
exploration and evaluation
assets - (68,179) - (68,179)
Charge for period 26,230 23,547 5,539 55,316
----------- ----------- ---------- ----------
At 31 December 2010 26,230 45,713 6,462 78,405
Charge 18,490 13,634 644 32,768
Exchange rate adjustment - (31) (25) (56)
----------- ----------- ---------- ----------
At 30 June 2011 44,720 59,316 7,081 111,117
----------- ----------- ---------- ----------
Net book value
At 30 June 2011 8,492,876 173,873 94,468 8,761,217
----------- ----------- ---------- ----------
At 31 Dec 2010 2,332,673 44,280 21,233 2,398,186
----------- ----------- ---------- ----------
Property, plant and equipment include assets under development
on the Group's Oil Shale Project which are carried at an
un-depreciated cost EUR4,427,688 (31 Dec 2010: EUR2,280,211).
5. Trade and other receivables
Un-audited Un-audited Audited
30/06/11 30/06/10 31/12/10
EUR EUR EUR
Trade Receivables 1,913,434 215,232 1,392,064
Prepayments & other debtors 3,680,283 745,141 138,529
Vat recoverable 979,934 133,144 62,999
Corporation tax - 3,658 -
----------- ----------- ----------
6,573,651 1,097,175 1,593,592
----------- ----------- ----------
6. Other financial Assets
Un-audited Un-audited Audited
30/06/11 30/06/10 31/12/10
EUR EUR EUR
Restricted cash at bank 1,379,193 1,654,619 1,491,802
1,379,193 1,654,619 1,491,802
----------- ----------- ----------
Restricted cash at bank relates to deposit accounts held in
support of bank guarantees required under the Moroccan exploration
licences held by the group.
7. Trade and other payables (Due within one year)
Un-audited Un-audited Audited
30/06/11 30/06/10 31/12/10
EUR EUR EUR
Trade creditors 7,670,399 3,260,354 2,119,563
Corporation tax 2,635 - 4,376
PAYE / PRSI 62,993 13,583 301,250
Other creditors 907,331 1,030,672 268,171
Accruals 781,290 308,611 3,066,157
9,424,648 4,613,220 5,759,517
----------- ----------- ----------
8. Loans and borrowings (Due within one year)
Un-audited Un-audited Audited
30/06/11 30/06/10 31/12/10
EUR EUR EUR
Convertible loan note - - 2,150,000
Other loans 477,638 - 2,555,911
Amounts due to Delta Hydrocarbons
B.V. 4,444,444 - 2,296,794
Amounts due to Mr. Philip Thompson - 718,546 1,496,782
4,922,082 718,546 8,499,487
----------- ----------- ----------
9. Loans and borrowings (Due after one year)
Un-audited Un-audited Audited
30/06/11 30/06/10 31/12/10
EUR EUR EUR
Convertible loan note - 2,550,000 -
Amounts due to Delta Hydrocarbons
B.V. 4,055,984 10,183,100 7,546,607
Other loans - 340,543 339,680
4,055,984 13,073,643 7,886,287
----------- ----------- ----------
10. Share capital
Un-audited Un-audited
30/06/11 30/06/10
Authorised EUR EUR
1,500,000,000 Ordinary shares of EUR0.05 each
(30 June 2010: 750,000,000) 75,000,000 37,500,000
----------- -----------
Issued No. Share Share
share Ordinary capital premium
capital Shares EUR EUR
At 1 Jan
2010 321,183,913 16,059,196 23,976,523
Issued
in
year 460,811,698 23,040,584 73,476,114
Share
issue
costs - - (5,863,422)
------------ ----------- ------------
At 31
Dec
2010 781,995,611 39,099,780 91,589,215
Issued
in
period 9,235,918 461,796 483,582
Share
issue
costs - - (416,819)
------------ ----------- ------------
At 30
June
2011 791,231,529 39,561,576 91,655,978
------------ ----------- ------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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