TIDMSTA
RNS Number : 1861G
Star Phoenix Group Ltd
15 March 2020
16 March 2020
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.
HALF-YEAR REPORT
Star Phoenix (AIM: STA), an international company with oil and
gas projects and oilfield service businesses in Trinidad and
Indonesia, today releases its half-year report (unaudited) for the
6 months ending 31 December 2019.
Highlights
-- Agreement signed for the sale of the Trinidad subsidiary, in exchange for offsetting all outstanding debt and
payables and a cash consideration of US$2.5 million. Closing of the transaction is underway with all key
completion conditions in place. Upon completion, the Company's indebtedness will be fully extinguished;
-- As part of restructuring, the Company's name was changed to Star Phoenix Group Ltd (from Range Resources Limited),
capital consolidation completed, and shares voluntarily delisted from the Australian Stock Exchange;
-- GBGBP0.7 m equity placing completed, a further GBGBP0.5 m placing underway;
-- The Company continues to review options for its rigs business (and associated equipment) and its Indonesia
interest;
-- The Company continues to evaluate new strategic business opportunities in various sectors;
-- An improved financial performance with materially reduced net loss after tax of US$5.5 m (prior year: US$35.9 m);
-- Revenues from upstream operations of US$5.4 m (prior year: US$6.4 m) and of US$0.03 m from oilfield services
(prior year: US$0.6 m);
-- An impairment of US$2.1 m recognised against the rigs; and
-- Cash balance of US$2.3 million (prior year: US$3.2 million).
*Prior year refers to six months ended 31 December 2018
About this Report
This half-year report (unaudited) is a summary of Star Phoenix
Group Ltd ("Star Phoenix") operations, activities and financial
position for the half-year ended 31 December 2019. It complies with
Australian reporting requirements. Star Phoenix (ABN 88 002 522
009) is a company limited by shares and is incorporated and
domiciled in Australia.
Unless otherwise stated in this report, all references to Star
Phoenix, the Group, the Company, we, us and our, refer to its
controlled entities as a whole. References to the half-year or
period are to the half-year ended 31 December 2019. All dollar
figures are expressed in United States currency unless otherwise
stated.
Directors' Report
The Directors of Star Phoenix and the entities it controls
(together, the "Group") present the financial report for the
half-year ended 31 December 2019.
Directors
The persons who were Directors at any time during or since the
end of the half-year are:
Name Position
===================== =======================================
Mr Zhiwei (Kerry) Gu Executive Chairman
===================== =======================================
Mr Lubing Liu Executive Director and Chief Operating
Officer
===================== =======================================
Dr Mu (Robin) Luo Non-Executive Director
===================== =======================================
Ms Juan (Kiki) Wang Non-Executive Director (resigned 22
July 2019)
===================== =======================================
The Directors were in office for the entire period unless
otherwise stated.
Principal activities
The principal activity of the Group during the period was oil
and gas exploration, development and production in Trinidad.
Dividends
No dividends have been declared, provided for or paid in respect
of the half-year ended 31 December 2019 (half-year ended 31
December 2018: Nil).
Financial position
The loss for the financial half-year ended 31 December 2019
after providing for income tax amounted to US$5,517,131 (loss for
half-year ended 31 December 2018: US$35,882,084).
At 31 December 2019, the Group had net liabilities of
US$46,958,639 (30 June 2019: net liabilities of US$42,693,702),
cash of US$2,325,128 (30 June 2019: US$880,681), and amortised
borrowings of US$48,051,916 (30 June 2019: US$46,151,690).
Auditor's Independence Declaration
The Lead auditor's independence declaration under section 307C
of the Corporations Act 2001 is set out on page 7 for the half-year
ended 31 December 2019. This report is made in accordance with a
resolution of the Board of Directors.
Operational and Corporate Review
Production
The Group's net oil production for the half-year was 95,435
barrels (average of 519 bopd), which is a 5% increase in production
from the prior six months of 494 bopd. Production activities
comprised low-cost workovers, reactivation and swabbing activities
on the existing wells.
RRTL sale / debt restructuring
During the period, the Company signed a binding conditional Sale
and Purchase Agreement with LandOcean Energy Services Co., Ltd
("LandOcean") for the sale of Range Resources Trinidad Limited
("RRTL") (the "SPA") in exchange for (i) offsetting all outstanding
debt and payables (including the convertible note) due from Star
Phoenix and its subsidiaries to LandOcean and its subsidiaries, and
(ii) a cash consideration of US$2.5 million (the "Transaction").
RRTL holds interests in all of the Company's oil and gas licences
in Trinidad, namely Morne Diablo, South Quarry, Beach Marcelle
(where RRTL holds a 100% interest), and St Mary's (where RRTL holds
an 80% interest).
On completion, all outstanding debt from Star Phoenix and its
subsidiaries to LandOcean and its subsidiaries (including the US$20
million convertible note) will be fully repaid by offsetting
against the consideration and all underlying debt agreements will
be terminated.
All key conditions for completion of the SPA have been
successfully completed.
During November 2019, LandOcean provided the first tranche of
the cash consideration of US$0.5 million to the Company. As
stipulated by the SPA, Star Phoenix procured mortgages over its
workover and swabbing rigs as security, with such mortgages to be
released upon completion or termination of the SPA.
Change of company name
Following approval at the AGM, the Company changed its name from
Range Resources Limited to Star Phoenix Group Ltd. The TIDM code
changed to "STA". The website address changed to
www.starphoenixgroup.com.
Capital consolidation
Following approval at the AGM, the Company's share capital was
consolidated on a 100:1 basis, effective 5 December 2019.
The Company's capital structure post consolidation is summarised
in the table below:
Ordinary Shares Options(1) Convertible Notes(2)
117,806,629 300,000 200,000
----------- ---------------------
Notes to the table above:
1. Options exercisable at GBP1.00 on or before on or before 30
March 2020.
2. Each convertible note with a face value of US$100, an annual
interest rate of 8%, a conversion price of GBP0.88, and a maturity
date of the earlier of 30 June 2020 and the date on which
completion occurs under the Transaction. The holder of the
convertible note (LandOcean) agreed not to convert any convertible
notes during the term of the SPA.
No options have been exercised during in the half-year ending 31
December 2019.
Voluntary delisting from the Australian Stock Exchange
("ASX")
The Company requested that ASX remove the Company from the
official list of ASX pursuant to ASX Listing Rule 17.11. As a
result, the Company's shares were removed from trading on ASX with
effect from 25 November 2019. No change occurred to the quotation
and trading of the Company's shares on the AIM market operated by
the London Stock Exchange plc.
GBP0.75 million subscription
The Company completed a subscription for new ordinary shares to
raise GBP0.75 million. As part of the subscription, the investor
can nominate up to two non-executive directors to the Board of the
Company and shall retain this ability for so long as it holds 10%
or more of the Company's shares in issue.
Director resignation
Ms Juan Wang tendered her resignation as Non-Executive Director
of the Company, effective 22 July 2019.
Drilling rigs sale
The Company signed a Sale and Purchase Agreement with Wilson
Energy Services Inc., a private company incorporated in Canada (the
"Buyer") for the sale of four drilling rigs and related equipment
for a total cash consideration of US$3.6 million.
Indonesia divestment
The Company continues to explore disposal opportunities of its
23% interest in the Indonesian oil and gas project.
Events subsequent to reporting date
Drilling rigs sale termination
Subsequent to the period end, the Company terminated the
previously proposed transaction with Wilson Energy Services Inc.
for the sale of the four drilling rigs due to the failure by the
buyer to provide the agreed cash consideration. The Company
commenced a new sale process for the drilling rigs and related
equipment, which is ongoing.
RRTL sale / debt restructure
Subsequent to the period end, the Company and LandOcean signed
an agreement in relation to the US$1 million cash consideration
(the "Payment") by LandOcean. The parties have agreed an extension
to the Payment on a rolling basis, subject to late fees of 8%
interest per annum, calculated daily from 12 February 2020 until
the date the Payment (and any accrued interest) is received by the
Company.
Subsequently, the Company received additional US$0.5 million
cash consideration from LandOcean. The remaining US$0.5 million
plus late fees of 8% interest per annum, calculated daily from 12
February 2020 are expected to be paid by the end of March 2020. The
final US$1 million will be paid within five business days of the
completion date. The Company also advised that all key conditions
for completion of the SPA have been successfully completed.
GBP0.52 million subscription
Subsequent to the period end, the Company signed a subscription
agreement with a new investor Thesolia Ltd (the "Investor"), for
new ordinary shares to raise approximately GBP520,000 (the
"Subscription"). Pursuant to the Subscription, the Company will
issue 23,561,326 new ordinary shares (the "Subscription Shares") at
a price of 2.21 pence per new ordinary share.
As part of the Subscription, the Investor can nominate up to two
non-executive directors to the Board of the Company and shall
retain this ability for so long as it holds 10% or more of the
Company's shares in issue.
On 26 February 2020, the Company was advised by the Investor of
the continued delays it was experiencing with its bank. The Company
agreed to provide a further extension to 31 March 2020, subject to
a late fee payment of 8% per annum, calculated daily from 7
February 2020 until the date the funds (and any accrued interest)
are actually received into the Company's account, in any event by
no later than 31 March 2020.
Trinidad Tax Appeals
Subsequent to the period end, the Company provided an update in
relation to the ongoing tax appeal matters that RRTL is involved
in. Two of the appeals were heard by the Tax Appeal Board in
Trinidad on 9 March 2020 and have now been set for trial on 26 and
27 May 2020. Two further tax appeal cases have been scheduled for
hearing on 26 May 2020. The total amount of all liabilities in
dispute against RRTL is approximately US$4.9 million.
Zhiwei Gu
Chairman
Dated this 13 day of March 2020
Auditor's Independence Declaration
<Intentionally left blank>
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Note Consolidated
========================================== ==== =========================
31 December 31 December
2019 (US$) 2018 (US$)
========================================== ==== =========== ============
Revenue from continuing operations 3 31,579 619,374
========================================== ==== =========== ============
Operating expenses (80,415) (836,118)
========================================== ==== =========== ============
Depreciation, depletion and amortisation (771,722) (1,617,857)
========================================== ==== =========== ============
Cost of sales 4a (852,137) (2,453,975)
========================================== ==== =========== ============
Gross loss (820,558) (1,834,601)
========================================== ==== =========== ============
Other income and expenses from continuing operations
===========================================================================
Other income - 33,029
========================================== ==== =========== ============
Net finance costs 4b (2,525,632) (1,072,380)
========================================== ==== =========== ============
General and administration expenses 4c (2,352,288) (1,989,848)
========================================== ==== =========== ============
Other expenses - (981,435)
========================================== ==== =========== ============
Impairment of non-current assets 4d (2,138,196) (9,319,345)
========================================== ==== =========== ============
Exploration expenditure and land
fees 4e (351,392) (908,202)
========================================== ==== =========== ============
Loss before income tax expense from
continuing operations (8,188,066) (15,091,347)
========================================== ==== =========== ============
Income tax credit/(expense) from
continuing operations 984,550 15,274
========================================== ==== =========== ============
Loss after income tax expense from
continuing operations (7,203,516) (15,076,072)
========================================== ==== =========== ============
Gain/(loss) from discontinued operations,
net of tax 7c 1,686,385 (20,806,012)
========================================== ==== =========== ============
Loss for the period attributable
to equity holders of Star Phoenix
Group Ltd (5,517,131) (35,882,084)
========================================== ==== =========== ============
Other comprehensive income
Items that may be reclassified to profit or loss
===========================================================================
Exchange differences on translation
of foreign operations 253,018 (788,499)
========================================== ==== =========== ============
Other comprehensive income/(loss)
for period, net of tax 253,018 (788,499)
========================================== ==== =========== ============
Total comprehensive loss attributable
to equity holders of Star Phoenix
Group Ltd (5,264,113) (36,670,583)
========================================== ==== =========== ============
Loss per share from continuing operations attributable to the
ordinary equity holders of the Company
===========================================================================
Basic loss per share (cents per share) (0.06) (0.01)
========================================== ==== =========== ============
Diluted loss per share (cents per N/A N/A
share)
========================================== ==== =========== ============
Loss per share from discontinued operations attributable to
the ordinary equity holders of the Company
===========================================================================
Basic gain/(loss) per share (cents
per share) 0.01 (0.01)
========================================== ==== =========== ============
Diluted loss per share (cents per N/A N/A
share)
========================================== ==== =========== ============
The above consolidated statement of profit or loss and other
comprehensive income should be read in conjunction with the
accompanying notes.
Consolidated Statement of Financial Position
Note Consolidated
==================================== ==== ============= =============
31 December 30 June
2019
2019 (US$) (US$)
==================================== ==== ============= =============
Assets
=========================================================
Current assets
========================================================= =============
Cash and cash equivalents 2,325,128 880,681
==================================== ==== ============= =============
Trade and other receivables 8 225,221 157,827
==================================== ==== ============= =============
Inventory - 959,304
==================================== ==== ============= =============
Other current assets 8 55,745 34,208
==================================== ==== ============= =============
Assets of disposal group classified
as held for sale 7a 103,648,369 83,609,947
==================================== ==== ============= =============
Total current assets 106,254,463 85,641,967
==================================== ==== ============= =============
Non-current assets
========================================================= =============
Deferred tax asset 180,575 -
==================================== ==== ============= =============
Property, plant and equipment 9 700,956 23,009,704
==================================== ==== ============= =============
Other non-current assets 260,222 -
==================================== ==== ============= =============
Total non-current assets 1,141,753 23,009,704
==================================== ==== ============= =============
Total assets 107,396,216 108,651,671
==================================== ==== ============= =============
Liabilities
==================================== ==== ============= =============
Current liabilities
========================================================= =============
Trade and other payables 12a 47,325,991 799,974
==================================== ==== ============= =============
Borrowings 13a 48,051,916 1,600,000
==================================== ==== ============= =============
Liabilities directly associated
with assets classified as held
for sale 7b 58,666,275 59,071,174
==================================== ==== ============= =============
Total current liabilities 154,044,182 61,471,149
==================================== ==== ============= =============
Non-current liabilities
========================================================= =============
Trade and other payables 12b - 44,997,793
==================================== ==== ============= =============
Borrowings 13b - 44,551,690
==================================== ==== ============= =============
Employee service benefits 310,673 324,742
==================================== ==== ============= =============
Total non-current liabilities 310,673 89,874,225
==================================== ==== ============= =============
Total liabilities 154,354,855 151,345,373
==================================== ==== ============= =============
Net (liabilities) (46,958,639) (42,693,702)
==================================== ==== ============= =============
Equity
========================================================= =============
Contributed equity 14 387,725,242 386,726,067
==================================== ==== ============= =============
Reserves 28,059,306 27,806,287
==================================== ==== ============= =============
Accumulated losses (462,743,187) (457,226,056)
==================================== ==== ============= =============
Total equity (46,958,639) (42,693,702)
==================================== ==== ============= =============
The above consolidated statement of financial position should be
read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
Contributed Accumulated Foreign Share-based Option Non-controlling Total equity
equity losses (US$) currency payment premium interests (US$) (US$)
(US$) translation reserve reserve
reserve (US$) (US$)
(US$)
============== =========== ============= =========== =========== ========== =============== ==============
Balance at 1
July 2018 383,918,397 (407,765,301) 4,341,219 8,424,371 12,057,362 3,517,873 4,493,922
=============== =========== ============= =========== =========== ========== =============== ==============
Exchange
difference on
translation of
foreign
operations - - (788,499) - - - (788,499)
=============== =========== ============= =========== =========== ========== =============== ==============
Loss for the
half-year - (32,364,211) - - - (3,517,873) (35,882,084)
=============== =========== ============= =========== =========== ========== =============== ==============
Total
comprehensive
loss - (32,364,211) (788,499) - - (3,517,873) (36,670,583)
=============== =========== ============= =========== =========== ========== =============== ==============
Transactions with owners in their capacity
as owners
=========================================== =========== =========== ========== =============== ==============
Issue of share
capital 1,312,682 - - - - - 1,312,682
=============== =========== ============= =========== =========== ========== =============== ==============
Value of share
based payments
issues - - - 14,211 - - 14,211
=============== =========== ============= =========== =========== ========== =============== ==============
Balance at 31
December 2018 385,231,079 (440,129,512) 3,552,720 8,438,582 12,057,362 - (30,849,768)
=============== =========== ============= =========== =========== ========== =============== ==============
Balance at 1
July 2019 386,726,067 (457,226,056) 7,432,461 8,316,464 12,057,362 - (42,693,702)
=============== =========== ============= =========== =========== ========== =============== ============
Exchange
difference on
translation of
foreign
operations - - 253,018 - - - 253,018
=============== =========== ============= =========== =========== ========== =============== ============
Loss
attributable
to the members
of the company - (7,203,516) - - - - (7,203,516)
=============== =========== ============= =========== =========== ========== =============== ============
Profit from
discontinued
operations - 1,686,385 - - - - 1,686,385
=============== =========== ============= =========== =========== ========== =============== ============
Total
comprehensive
loss 386,726,067 (462,743,187) 7,685,479 8,316,464 12,057,362 - (47,957,815)
=============== =========== ============= =========== =========== ========== =============== ============
-
============== =========== ============= =========== =========== ========== =============== ============
Transactions with owners in their capacity
as owners
=========================================== =========== =========== ========== =============== ============
Issue of share
capital 999,176 - - - - - 999,176
=============== =========== ============= =========== =========== ========== =============== ============
Balance at 31
December 2019 387,725,243 (462,743,187) 7,685,479 8,316,464 12,057,362 - (46,958,639)
=============== =========== ============= =========== =========== ========== =============== ============
The above consolidated statement of changes in equity should be
read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
Consolidated
-------------------------------------------- --------------------------
31 December 31 December
2019 (US$) 2018 (US$)
-------------------------------------------- ------------ ------------
Receipts from customers 3,248,865 4,881,280
-------------------------------------------- ------------ ------------
Payments to suppliers and employees (6,406,937) (5,909,501)
-------------------------------------------- ------------ ------------
Income taxes paid 1,198,763 (207,395)
-------------------------------------------- ------------ ------------
Interest (paid)/received and other
finance costs received/(paid) (2,596) 18,555
-------------------------------------------- ------------ ------------
Net cash outflow from operating activities (1,961,905) (1,217,061)
-------------------------------------------- ------------ ------------
Payment for property, plant & equipment - (191,232)
-------------------------------------------- ------------ ------------
Payments for exploration and evaluation
expenditure - (559,673)
-------------------------------------------- ------------ ------------
Acquisitions - (20,000)
-------------------------------------------- ------------ ------------
Proceeds from disposal of property,
plant and equipment 28,109 14,487
-------------------------------------------- ------------ ------------
Net cash inflow/(outflow) from investing
activities 28,109 (756,418)
-------------------------------------------- ------------ ------------
Receipts from share issue 999,176 1,260,173
-------------------------------------------- ------------ ------------
Interest and other finance costs - (52,507)
-------------------------------------------- ------------ ------------
Net cash inflow from financing activities 999,176 1,207,666
-------------------------------------------- ------------ ------------
Net decrease in cash and cash equivalents (934,620) (765,813)
-------------------------------------------- ------------ ------------
Net foreign exchange differences 22,251 57,627
-------------------------------------------- ------------ ------------
Cash and cash equivalents at beginning
of period 3,237,497 3,945,683
-------------------------------------------- ------------ ------------
Cash and cash equivalents at end of
period 2,325,128 3,237,497
-------------------------------------------- ------------ ------------
The above consolidated statement of cash flows should be read in
conjunction with the accompanying notes.
Notes to Consolidated Financial Statements
Note 1: Basis of preparation
The half-year consolidated financial statements are a general
purpose financial report prepared in accordance with the
requirements of the Corporations Act 2001 and Accounting Standard
AASB 134: Interim Financial Reporting. These accounts were
authorised for issue on 13 March 2020.
The half-year financial statements do not include all the notes
of the type normally included in an annual financial report.
Accordingly, it is recommended that these financial statements be
read in conjunction with the annual financial report for the year
ended 30 June 2019 and any public announcements made by Star
Phoenix and its controlled entities during the half-year in
accordance with continuous disclosure requirements arising under
the Corporations Act 2001.
Material accounting policies adopted in the preparation of these
financial statements are presented below and have been consistently
applied unless stated otherwise.
Reporting basis and conventions
The half-year financial statements have been prepared on an
accruals basis and are based on historical costs modified by the
revaluation of selected non-current assets, financial assets and
financial liabilities for which the fair value basis of accounting
has been applied.
New and amended accounting standards
In the period ended 31 December 2019, the Directors have
reviewed all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to the Company and effective
for the current reporting periods beginning on or after 1 July
2019. As a result of this review, the Group has applied AASB 16
from 1 July 2019.
AASB 16 Leases
AASB 16 replaces AASB 117 Leases and sets out the principles for
the recognition, measurement, presentation and disclosure of
leases.
AASB 16 introduces a single lessee accounting model and requires
a lessee to recognise assets and liabilities for all leases with a
term of more than 12 months, unless the underlying asset is of low
value. A lessee is required to recognise a right-of-use asset
representing its right to use the underlying leased asset and a
lease liability representing its obligations to make lease
payments. A lessee measures right-of-use assets similarly to other
non-financial assets (such as property, plant and equipment) and
lease liabilities similarly to other financial liabilities. As a
consequence, a lessee recognises depreciation of the right-of-use
asset and interest on the lease liability, and also classifies cash
repayments of the lease liability into a principal portion and an
interest portion and presents them in the statement of cash flows
applying AASB 107 Statement of Cash Flows. AASB 16 substantially
carries forward the lessor accounting requirements in AASB 117
Leases. Accordingly, a lessor continues to classify its leases as
operating leases or finance leases, and to account for those two
types of leases differently.
AASB 16 is effective from annual reporting periods beginning on
or after 1 January 2019. A lessee can choose to apply the Standard
using a full retrospective or modified retrospective approach.
There is no material impact to profit or loss or net assets on the
adoption of this new standard in the current or comparative
periods.
Standards and Interpretations in issue not yet adopted
The Directors have also reviewed all Standards and
Interpretations in issue not yet adopted for the period ended 31
December 2019. As a result of this review the Directors have
determined that there is no material impact of the Standards and
Interpretations in issue not yet adopted on the Group and,
therefore, no change is necessary to Group accounting policies.
Going concern
The Group recorded a loss of of US$5.3 million for the period
ending 31 December 2019. The Group also reports a net liability
position of US$47.0 million. At the reporting date, the Company had
US$2.3 million of unrestricted cash at bank.
The Directors believe that sufficient funds will be available to
meet the Group's working capital requirements as at the date of
this report as the conclusion of the sale of Range Resources
Trinidad Limited to LandOcean as described in note 7 which will
subsequently result in its debt restructuring, is expected to be
concluded by 30 June 2020.
If for any unforseen reasons the transaction with LandOcean is
abandoned, there will be a material uncertainty that may cast a
signficiant doubt about the Group's ability to continue as a going
concern, and therefore it may be unable to realise its assets and
discharge its liabilities in the normal course of business.
The Directors have prepared the financial statements on a going
concern basis, which contemplates continuity of normal business
activities and the realisation of assets and discharge of
liabilities in the normal course of business.
Should the Company not be able to continue as a going concern,
it may be required to realise its assets and discharge its
liabilities other than in the ordinary course of business and at
amounts that differ from those stated in the financial statements.
The financial report does not include any adjustments relating to
the amounts or classification of recorded assets or liabilities
that might be necessary if the Group does not continue as a going
concern.
Non-current assets classified as held for sale
Non-current assets are classified as held for sale if their
carrying amount will be recovered principally through a sale
transaction rather than through continuing use. They are measured
at the lower of their carrying amount and fair value less costs to
sell. For non-current assets to be classified as held for sale,
they must be available for immediate sale in their present
condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent
write down of the non-current assets to fair value less costs to
sell. A gain is recognised for any subsequent increases in fair
value less costs to sell of a non-current asset, but not in excess
of any cumulative impairment loss previously recognised.
Non-current assets are not depreciated or amortised while they
are classified as held for sale. Interest and other expenses
attributable to the liabilities of assets held for sale continue to
be recognised.
Non-current assets classified as held for sale are presented
separately on the face of the consolidated statement of financial
position, in current assets. The liabilities of disposal groups
classified as held for sale are presented separately on the face of
the statement of financial position, in current liabilities.
Discontinued operations
A discontinued operation is a component of the Group's business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which:
-- represents a separate major line of business or geographical area of operations
-- is part of a single co-ordinated plan to dispose of a
separate major line of business or geographical area of
operations
-- is a subsidiary acquired exclusively with a view to resale
Classification as a discontinued operation occurs at the earlier
of disposal or when the operation meets the criteria to be
classified as held-for-sale.
When an operation is classified as a discontinued operation, the
comparative consolidated statement of profit or loss and other
comprehensive income is re-presented as if the operation had been
discontinued from the start of the comparative year.
Note 2: Significant estimates and judgements
Star Phoenix owns 65% of the issued share capital of Strait Oil
& Gas Limited ("SOG"). This is achieved by interest through a
45% shareholding held by Star Phoenix itself plus a 20%
shareholding through its full ownership of Georgian Oil Pty Ltd.
This has been consolidated and is now held through 65% by Star
Phoenix itself. Despite owning a majority of the issued share
capital, management do not view this as control and the principal
rationale for that view is as follows:
-- Star Phoenix has not appointed directors of SOG so exercises
no effective control over the company. The sole director of SOG is
a different corporate entity;
-- All shareholders must agree to any termination of the
management agreement which governs the role of the appointed
director.
-- The Articles of Association of SOG are silent on the ability
of shareholders to appoint directors. To appoint a director,
management believe that the articles would need to be amended. To
amend the articles requires a special resolution which needs 75%
votes (Star Phoenix only controls 65%) and management do not
believe they would get support from the other shareholders to do
this;
In practice all decision making and corporate activities require
consent of all the shareholders resulting in Star Phoenix have no
demonstrable control over SOG.
The Group therefore intends to continue to account for this as
an other asset with a carrying value equal to the US$20,000 cost of
acquiring Georgian Oil Pty Ltd. All previous costs incurred by Star
Phoenix in relation to SOG have been impaired and the Company will
continue to expense any ongoing expenses which are incurred.
Non-current assets classified as held for sale and discontinued
operations
Towards the end of the financial year ended 30 June 2019, the
Group undertook a review of the oil and gas business culminating in
the decision to sell Range Resources Trinidad Limited to LandOcean.
The Board of Directors have judged that as a result of this review,
the assets and associated liabilities of Range Resources Trinidad
Limited should be classified as held for sale as at 30 June 2019
and all operations of Range Resources Trinidad Limited to be
classified as discontinued. In reaching this judgement, the Board
of Directors have considered that the requirements of AASB 5:
Non-current assets held for sale and discontinued operations have
been met.
During the half-year period, the Company signed a Sale and
Purchase Agreement for the sale of four drilling rigs and related
equipment which was terminated as explained in note 17. Following
that, the Group commenced a new sale process for the drilling rigs
and related equipment. The Board of Directors have judged that as a
result of this, the corresponding assets of Range Resources
Drilling Services Ltd should be classified as held for sale as at
31 December 2019.
Producing asset expenditure
The classification of exploration and evaluation expenditure to
producing assets is based on the time of first commercial
production. Producing asset expenditure for each area of interest
is carried forward as an asset provided certain conditions are met
and depreciated on a unit of production basis on P1 reserves. P1
reserves have been determined by an independent expert. Producing
assets are assessed for impairment when facts and circumstances
suggest that the carrying amount of a production asset may exceed
its recoverable amount. These timings, calculations and reviews
require the use of assumptions and judgement.
Reserves and resources
Estimates of reserves requires judgement to assess the size and
quality of reservoirs and
their anticipated recoveries. Estimates of reserves are used to
calculate depreciation,
depletion and amortisation charges.
Impairment of goodwill and assets
The Group tests whether goodwill or the producing/fixed assets
have suffered any impairment in accordance with its accounting
policies. The recoverable amount of the cash-generating unit to
which the assets belong is estimated based on the present value of
future cash flows. The expected future cash flow estimation is
always based on a number of factors, variables and assumptions, the
most important of which are estimates of reserves, future
production profiles, commodity prices and costs. In most cases, the
present value of future cash flows is most sensitive to estimates
of future oil price and discount rates. A change in the modelled
assumptions in isolation could materially change the recoverable
amount. Refer to note 4 for details of these key assumptions.
Other assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which they
are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of
assets (cash-generating units). Non-financial assets other than
goodwill that suffered an impairment are reviewed for possible
reversal of the impairment at the end of each reporting period.
Deferred tax liability
Upon acquisition of SOCA Petroleum Ltd in June 2011, in
accordance with the requirement of AASB 112 Income Taxes, a
deferred tax liability of US$46,979,878 was recognised in relation
to the difference between the carrying amount for accounting
purposes of deferred development assets and their actual cost base
for tax purposes.
In the event that the manner by which the carrying value of
these assets is recovered differs from that which is assumed for
the purpose of this estimation, the associated tax charges may be
significantly less than this amount.
Recoverability of deferred tax assets
Deferred tax assets are recognised only if it is probable that
future taxable amounts will be
available to utilise those temporary differences and losses.
Management considers that it
is probable that future taxable profits will be available to
utilise those temporary differences. Judgement is required to
determine the amount of deferred tax assets that can be recognised,
based upon the likely timing and the level of future profits.
Share based payments transactions
The Group measures the cost of equity-settled share-based
payment transactions with
employees by reference to the fair value of the equity
instruments at the grant date. The
fair value is determined using a Black-Scholes model. The
accounting estimates and
assumptions relating to equity-settled share-based payments
would have no impact on
the carrying amounts of assets and liabilities within the next
annual reporting period but
may impact expenses and derivative liability.
Contingent liabilities
The Directors are of the opinion that no provision is required
to be raised in respect to any
of the matters disclosed in note 5 as the likely outcome of any
outflow is considered to
be remote.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a
degree of estimation and
judgement. It is based on the lifetime expected credit loss,
grouped based on days
overdue, and makes assumptions to allocate an overall expected
credit loss rate for
each group. These assumptions include recent sales experience
and historical collection
rates.
Rehabilitation provision
A provision has been made for the present value of anticipated
costs for future
rehabilitation of land explored. The Group's exploration
activities are subject to various
laws and regulations governing the protection of the
environment. The Group recognises
management's best estimate for assets retirement obligations and
site rehabilitations in
the period in which they are incurred. Actual costs incurred in
the future periods could
differ materially from the estimates. Additionally, future
changes to environmental laws
and regulations and discount rates could affect the carrying
amount of this provision.
Note 3: Revenue
Consolidated
------------------------------------- --------------------------
31 December 31 December
2019 (US$) 2018 (US$)
------------------------------------- ------------ ------------
From continuing operations
------------------------------------------------------------------
Revenue from services to third
parties recognised over time 31,579 619,374
-------------------------------------- ------------ ------------
Total revenue from continuing
operations 31,579 619,374
-------------------------------------- ------------ ------------
From discontinued operations
------------------------------------- ------------ ------------
Revenue from sale of oil recognised
at a point in time 5,444,010 6,368,004
-------------------------------------- ------------ ------------
Total revenue from discontinued
operations 5,444,010 6,368,004
-------------------------------------- ------------ ------------
Note 4: Expenses
Consolidated
---------------------------------------- --------------------------
31 December 31 December
2019 (US$) 2018 (US$)
---------------------------------------- ------------ ------------
a: Cost of sales - continuing operations
---------------------------------------------------------------------
Costs of operations 80,415 836,118
----------------------------------------- ------------ ------------
Depreciation and amortisation 771,722 1,617,857
----------------------------------------- ------------ ------------
Total cost of sales from continuing
operations 852,137 2,453,975
----------------------------------------- ------------ ------------
a: Cost of sales - discontinued
operations
---------------------------------------- ------------ ------------
Costs of production 1,436,074 1,606,883
----------------------------------------- ------------ ------------
Royalties 2,030,022 2,384,866
----------------------------------------- ------------ ------------
Staff costs 674,046 903,123
----------------------------------------- ------------ ------------
Depreciation and amortisation 704,483 793,189
----------------------------------------- ------------ ------------
Total cost of sales from discontinued
operations 4,844,625 5,688,061
----------------------------------------- ------------ ------------
b: Finance costs/(income) - continuing operations
---------------------------------------------------------------------
Fair value movement of derivative
liability (113) (241,113)
----------------------------------------- ------------ ------------
Fair value movement of option
liability - (51,218)
----------------------------------------- ------------ ------------
Interest expense/(income) 1,286,040 (45,228)
----------------------------------------- ------------ ------------
Interest on convertible note 1,239,705 1,409,939
----------------------------------------- ------------ ------------
Total finance costs from continuing
operations 2,525,632 1,072,380
----------------------------------------- ------------ ------------
b: Finance costs/(income) -
discontinued operations
---------------------------------------- ------------ ------------
Other expenses 393,225 343,461
----------------------------------------- ------------ ------------
Foreign exchange loss 209,519 -
---------------------------------------- ------------ ------------
Total finance costs from discontinued
operations 602,744 343,461
----------------------------------------- ------------ ------------
c: General and administration expenses - continuing operations
---------------------------------------------------------------------
Directors' and officers' fees
and benefits 954,938 421,214
----------------------------------------- ------------ ------------
Share based payments - employee,
director and consultant options - 32,714
----------------------------------------- ------------ ------------
Foreign exchange - 620,302
----------------------------------------- ------------ ------------
Other expenses 1,397,350 915,618
----------------------------------------- ------------ ------------
Total general and administration
expenses from continuing operations 2,352,288 1,989,848
----------------------------------------- ------------ ------------
c: General and administration
expenses - discontinued operations
---------------------------------------- ------------ ------------
Other expenses 324,962 311,130
----------------------------------------- ------------ ------------
Total general and administration
expenses from discontinued operations 324,962 311,130
----------------------------------------- ------------ ------------
d: Asset values written down - continuing operations
---------------------------------------------------------------------
Impairment (i) 2,138,196 9,319,345
----------------------------------------- ------------ ------------
d: Asset values written down
from discontinued operations
---------------------------------------- ------------ ------------
Impairment (i) - 47,880,505
----------------------------------------- ------------ ------------
Total assets written down 2,138,196 57,199,850
----------------------------------------- ------------ ------------
e: Exploration expenditure -
continuing operations
---------------------------------------- ------------ ------------
Trinidad 351,392 348,530
----------------------------------------- ------------ ------------
Indonesia - 559,673
----------------------------------------- ------------ ------------
Total exploration expenditure
from continuing operations 351,392 908,202
----------------------------------------- ------------ ------------
(i) Impairment
Impairment testing was performed during the prior period
half-year as impairment indicators were identified and an
impairment was recorded. The impairment was due to a combination of
lower assumed long-term oil prices together with a deferred work
programme. In line with the announced work plans for 2019, Star
Phoenix did not anticipate any material production growth during
2019 and when updating the models for the revised production
profiles resulted in a lower NPV. This was exasperated by lower oil
prices assumption when compared to the impairment review in
September 2018. The long term WTI forward price had settled into a
band of between US$53 - $55/bbl which was just above the level at
which Supplemental Petroleum Tax takes effect. This had a
materially negative impact on the NPV calculation and Star Phoenix
believes this highlighted the regressive nature of this particular
tax. As a result, a goodwill impairment of US$3,241,472 and
Trinidad asset impairment of US$47,880,505 were recorded.
In Indonesia, despite continued efforts by the operator of the
project to establish stable and continuous production from the
field, no material production had been achieved from the work
programme to date. As a result, a decision was made to fully impair
the asset related to Indonesia exploration, which resulted to an
impairment of US$6,077,873 in the prior year.
Impairment testing was not performed at half-year, although
impairment indicators were identified, due to the fact that the
book value of the producing assets was supported by the
consideration of the SPA signed between the Group and LandOcean.
Please refer to note 7 for further information on the
agreement.
The impairment of US$2.1 million relates to the rigs, for
further information refer to notes 6 and 9.
Note 5: Contingent liabilities
Geeta Maharaj: There have been no updates since June 2019 on
this case. There are no other changes to report on contingent
liabilities.
Note 6: Discontinued operations
Towards the end of the financial year ended 30 June 2019, the
Group entered negotiations with LandOcean to sell Range Resources
Trinidad Limited. On 2 September 2019, the parties successfully
signed a binding conditional Sale and Purchase Agreement for the
sale of Range Resources Trinidad Limited to LandOcean in exchange
for offsetting all outstanding debt and payables (including the
convertible note) due from Range and its subsidiaries to LandOcean
and its subsidiaries, and a cash consideration of US$2,500,000.
The Board of Directors decided that Range Resources Trinidad
Limited will be presented on the Statement of Financial Position as
held for sale as at 30 June 2019. The long stop date of the
transaction is 30 June 2020 therefore the entity will also be
presented as held for sale for the half-year ended 31 December
2019.
Total debt and payables as at 31 December 2019, which do not
form part of the assets held for sale and associated liabilities
are detailed below.
Debtor Creditor Amount (US$)
Agreement Regarding Amounts
Outstanding between the Purchaser
and RRDSL dated 30 November LandOcean
2017 RRDSL Energy Services 1,878,458
-------- ------------------------ -------------
Agreement Regarding Amounts
Outstanding between EPT and
RRDSL dated 30 November 2017 RRDSL EPT 1,306,958
-------- ------------------------ -------------
Agreement Regarding Amounts
Outstanding between GPN and
RRDSL dated 30 November 2017 RRDSL GPN 487,447
-------- ------------------------ -------------
Agreement Regarding Amounts
Outstanding between LOPCL and
RRDSL dated 30 November 2017 RRDSL LOPCL 22,167,122
-------- ------------------------ -------------
Agreement Regarding Amounts
Outstanding between CWUPET and
RRDSL dated 30 November 2017 RRDSL CWUPET 612,564
-------- ------------------------ -------------
Hong Kong
Fu Tong International
Purchase Order No. 9 in respect Petroleum
of the IMSC dated 31 January Technology
2018 RRL Ltd 553,012
-------- ------------------------ -------------
Letter Agreement to the IMSC
and Purchase Orders entered
into by the Purchaser, RRDSL,
CWUPET, and PST Service Corp.
(together as the Contractor)
and the Seller, Range Resources
GY Shallow Limited and the Company LandOcean
dated 6 April 2017 RRL Energy Services 45,045,913
-------- ------------------------ -------------
Sale and Purchase Agreement
between SOCA and LOPCL dated
27 April 2017 SOCA LOPCL 502,704
-------- ------------------------ -------------
Convertible note deed between
the Seller and the Purchaser LandOcean
date 31 December 2019 RRL Energy Services 21,600,000
-------- ------------------------ -------------
Grand total 94,154,178
-------------
Note 7a: Assets of disposal group classified as held for
sale
Note Consolidated
------------------------------- ------ ---------------------------
31 December 30 June 2019
2019 (US$) (US$)
------------------------------- ------ ------------ -------------
Current assets
Cash and cash equivalents 474,316 967,140
------------ -------------
Trade and other receivables 3,103,230 4,320,067
------------ -------------
Other current assets 2,102,695 2,064,575
------------ -------------
Inventory related to rigs 832,021 959,304
------------ -------------
Total current assets 6,512,262 7,351,782
------------ -------------
Non-current assets
Deferred tax asset 17,762,045 15,439,010
------------ -------------
Rigs 20,456,291 21,836,990
------------ -------------
Property, plant and equipment 1,191,150 1,159,235
------------ -------------
Producing assets 57,463,009 58,986,034
------------ -------------
Exploration assets 673,169 673,886
------------ -------------
Total non-current assets 97,545,664 76,258,165
------------ -------------
Total held for sale assets 104,057,926 83,609,947
------------ -------------
Disposal of Range Resources Trinidad Limited
On 2 September 2019, Star Phoenix and LandOcean successfully
signed a binding conditional Sale and Purchase Agreement for the
sale of Range Resources Trinidad Limited (disposal group classified
as held for sale) to LandOcean in exchange for offsetting all
outstanding debt and payables (including the convertible note) due
from Star Phoenix Group and its subsidiaries to LandOcean and its
subsidiaries, and a cash consideration of US$2,500,000.
The first tranche of the cash consideration of US$500,000
("Deposit") has already been received by the Company. Further
US$1,000,000 was due to be paid within five business days of the
approval of the shareholders' meeting of LandOcean ("First
payment") and US$1,000,000 is to be paid within five business days
of the completion date ("Final payment"). The First Payment was
delayed due to coronavirus outbreak in China. LandOcean and the
Company agreed an extension to the First Payment on a rolling
basis, subject to late fees of 8% interest per annum, calculated
daily from 12 February 2020 until the date the First Payment (and
any accrued interest) is received by the Company.
The completion was subject to shareholder and government
approvals which have all been obtained. The agreed long stop date
for the Transaction is 30 June 2020.
If the key conditions for completion were not satisfied by 30
June 2020, the deposit and the first payment (together with
interest accrued at 8% per annum) would be repaid to LandOcean. If
all conditions are satisfied but LandOcean chooses not to proceed
with completion for any reason, the Deposit and the First Payment
would be retained by Star Phoenix Group.
Star Phoenix provided mortgages over its workover and swabbing
rigs as security, with such mortgages to be released upon
completion or termination of the SPA. This was to provide comfort
to LandOcean in case the key conditions for completion are not
satisfied by 30 June 2020. The book value of the rigs mortgaged is
US$1,539,370.
Disposal of rigs and related inventory held by Range Resources
Drilling Services
The Company signed a Sale and Purchase Agreement with Wilson
Energy Services Inc., a private company incorporated in Canada (the
"Buyer") for the sale of four drilling rigs and related equipment
for a total cash consideration of US$3.6 million during the
period.
Subsequent to the period end, due to the Buyer failing to
provide the Company with the agreed cash consideration, the Company
terminated the proposed transaction with the Buyer and commenced a
new sale process for the drilling rigs and related equipment.
In addition, the Company engaged a third party with specific
knowledge and experience in rigs similar to those of the company,
in order to provide a valuation of its rigs, which are included
under "Property equipment and access roads", resulting in a
valuation of US$21.8 million. During the period, the rigs were
impaired by US$2,138,196.
Note 7b: Liabilities directly associated with assets classified
as held for sale
Note Consolidated
--------------------------------- ------ ---------------------------
31 December 30 June 2019
2019 (US$) (US$)
--------------------------------- ------ ------------ -------------
Current liabilities
Trade and other payables 18,619,837 18,694,044
------------ -------------
Deferred tax liabilities 39,050,301 40,090,332
------------ -------------
Other liabilities 996,137 286,798
------------ -------------
Total current liabilities 58,666,275 59,071,174
------------ -------------
Total held for sale liabilities 58,666,275 59,071,174
------------ -------------
Note 7c: Discontinued operations
The financial performance of Range Resources Trinidad Limited is
shown below.
Note Consolidated
-------------------------------------- ----- ---------------------------
2019 (US$) 2018 (US$)
-------------------------------------- ----- ------------ -------------
Financial Performance and cash flow information
Revenue from sale of oil 3 5,444,010 6,368,004
----- ------------ -------------
Royalties 4a (2,030,022) (2,384,866)
----- ------------ -------------
Operating expenses (2,110,121) (2,510,006)
----- ------------ -------------
Oil and gas properties depreciation,
depletion and amortisation (704,483) (793,189)
----- ------------ -------------
Administrative expenses 4c (324,962) (311,130)
----- ------------ -------------
Impairment expense - (47,880,505)
----- ------------ -------------
Finance expenses 4b (602,744) (343,461)
----- ------------ -------------
Taxation (charge)/benefit 2,014,707 27,049,142
----- ------------ -------------
Total gain/(loss) after tax 1,686,385 (20,806,012)
----- ------------ -------------
Note 8: Trade and other receivables
Note Consolidated
----------------------------------- ------ --------------------------
31 December 30 June
2019 (US$) 2019 (US$)
----------------------------------- ------ ------------ ------------
Current
-----------------------------------------------------------------------
Trade receivables 105,169 157,827
------------------------------------------- ------------ ------------
Taxes receivable 120,052 -
----------------------------------- ------ ------------ ------------
Total trade and other receivables 225,221 157,827
------------------------------------------- ------------ ------------
Fair value approximates the carrying value of trade and other
receivables at 31 December 2019 and 30 June 2019.
Trade receivables are generally due for settlement within 30
days. They are presented as current assets unless collection is not
expected for more than 12 months after the reporting date. Trade
receivables are neither past due nor impaired.
Note Consolidated
---------------------- ------ --------------------------
31 December 30 June
2019 (US$) 2019 (US$)
---------------------- ------ ------------ ------------
Current
----------------------------------------------------------
Prepayments 55,745 34,208
------------------------------ ------------ ------------
Other current assets 55,745 34,208
------------------------------ ------------ ------------
Note 9: Property, plant & equipment
Consolidated Production Gathering Leasehold Motor vehicle,
equipment station improvement furniture, Total (US$)
and access and field (US$) fixtures
roads (US$) office (US$) & fittings
(US$)
----------------- ------------ ------------- ------------ -------------- -------------
At 31 December 2019
-------------------------------------------------------------------------------------------
Cost 22,588,551 - - 1,153,280 23,741,831
----------------- ------------ ------------- ------------ -------------- -------------
Accumulated
depreciation (2,541,817) - - (452,324) (2,994,141)
----------------- ------------ ------------- ------------ -------------- -------------
Classified as
held for sale (20,046,734) - - - (20,046,734)
----------------- ------------ ------------- ------------ -------------- -------------
Net book amount - - - 700,956 700,956
----------------- ------------ ------------- ------------ -------------- -------------
Half-year ended 31 December 2019
-------------------------------------------------------------------------------------------
Opening net
book amount 22,297,641 - - 712,063 23,009,704
----------------- ------------ ------------- ------------ -------------- -------------
Foreign currency
movement (44,737) - - 12,548 (32,189)
----------------- ------------ ------------- ------------ -------------- -------------
Disposals (2,986) - - - (2,986)
----------------- ------------ ------------- ------------ -------------- -------------
Impairment (2,138,196) - - - (2,138,196)
----------------- ------------ ------------- ------------ -------------- -------------
Depreciation
charge (748,067) - - (23,655) (771,722)
----------------- ------------ ------------- ------------ -------------- -------------
Other movement 683,079 - - - 683,079
----------------- ------------ ------------- ------------ -------------- -------------
Classified as
held for sale (20,046,734) - - - (20,046,734)
----------------- ------------ ------------- ------------ -------------- -------------
Closing net
book amount - - - 700,956 700,956
----------------- ------------ ------------- ------------ -------------- -------------
At 30 June 2019
-------------------------------------------------------------------------------------------
Cost 24,091,391 76,001 181,490 1,140,732 25,489,614
----------------- ------------ ------------- ------------ -------------- -------------
Accumulated
depreciation (1,793,750) (76,001) (181,490) (428,669) (2,479,910)
----------------- ------------ ------------- ------------ -------------- -------------
Net book amount 22,297,641 - - 712,063 23,009,704
----------------- ------------ ------------- ------------ -------------- -------------
Note 10: Exploration assets
Note Consolidated
----------------------------- ------ ---------------------------
31 December 30 June
2019 (US$) 2019 (US$)
----------------------------- ------ ------------- ------------
Opening balance - 6,744,977
------------------------------------- ------------ ------------
Acquisition - -
----------------------------- ------ ------------- ------------
Impairment (i) - (6,077,873)
------------------------------------- ------------ ------------
Foreign exchange - 6,782
------------------------------------- ------------ ------------
Classified as held for sale
(note 7a) (673,886)
---------------------------------------------------- ------------
Total exploration assets - -
------------------------------------- ------------ ------------
(i) Impairment
In Indonesia, despite continued efforts by the operator of the
project to establish stable, continuous production from the field,
no material production had been achieved from the work programme to
30 June 2019. As a result, a decision was made to fully impair the
asset related to Indonesia exploration during that period.
The value of exploration assets as per 31 December 2019 relates
to the Group's interests in the Guayaguayare and St Mary's blocks
in Trinidad and are classified as held for sale. Refer to note 7
for more information.
Note 11: Producing assets
Consolidated
----------------------------- ----------------------------
31 December 30 June
2019 (US$) 2019 (US$)
----------------------------- ------------- -------------
Cost - 46,006,207
------------------------------ ------------ -------------
Accumulated amortisation - (46,006,207)
------------------------------ ------------ -------------
Net book value - -
----------------------------- ------------- -------------
Opening net book amount - 109,091,650
------------------------------ ------------ -------------
Foreign currency movement - 1,053,641
------------------------------ ------------ -------------
(Disposals)/additions - 1,407,974
------------------------------ ------------ -------------
Impairment (Note 9a) - (51,320,529)
------------------------------ ------------ -------------
Amortisation charge - (1,246,702)
------------------------------ ------------ -------------
Classified as held for sale
(note 7a) (58,986,034)
--------------------------------------------- -------------
Closing net book amount - -
------------------------------ ------------ -------------
The net book amount of producing assets is US$57,463,009
classified as held for sale. Refer to note 7a for more
information.
Note 12: Trade and other payables
Consolidated
--------------------------
31 December 30 June
2019 (US$) 2019 (US$)
------------ ------------
a: Current
----------------------------------------------------------------
Trade payables - non-interest
bearing 699,505 648,693
------------------------------------ ------------ ------------
Trade payables - interest bearing 42,798,904 -
----------------------------------- ------------ ------------
Other payables - interest bearing 3,780,142 -
----------------------------------- ------------ ------------
Sundry payables and accrued
expenses 27,688 133,809
------------------------------------ ------------ ------------
Tax liabilities 19,752 17,472
------------------------------------ ------------ ------------
Total current trade and other
payables 47,325,991 799,974
------------------------------------ ------------ ------------
b: Non-current
----------------------------------------------------------------
Interest bearing trade payables - 44,395,944
------------------------------------ ------------ ------------
Other payables - interest bearing - 482,886
------------------------------------ ------------ ------------
Other payables - non-interest
bearing - 118,963
------------------------------------ ------------ ------------
Total non-current trade and
other payables - 44,997,793
------------------------------------ ------------ ------------
Non-interest bearing trade payables are suppliers payables under
the normal course of business. Interest bearing trade payables are
amounts due to LandOcean for previous work performed. Interest
bearing other payables relate to the consideration due to LandOcean
Petroleum Corp Ltd for RRDSL acquisition, interest bearing at 6% on
net balance outstanding, as well as US$0.5 million due to LandOcean
interest bearing at 8% which would be payble if the transaction was
cancelled in case the relevant approvals for the transaction are
not obtained. Refer to note 7a for full details of the transaction
with LandOcean.
Note 13: Borrowings
Consolidated
--------------------------------------- --------------------------
31 December 30 June
2019 (US$) 2019 (US$)
--------------------------------------- ------------ ------------
a. Borrowings - current
--------------------------------------- ------------ ------------
Convertible note liability 19,999,521 -
--------------------------------------- ------------ ------------
Convertible note liability (interest) 1,600,000 1,600,000
---------------------------------------- ------------ ------------
Borrowings at amortised cost 26,452,395 -
(i)
--------------------------------------- ------------ ------------
Total current borrowings 48,051,916 1,600,000
---------------------------------------- ------------ ------------
Consolidated
------------------------------ ---------------------------
31 December 30 June
2019 (US$) 2019 (US$)
------------------------------ ------------- ------------
b. Borrowings - non-current
------------------------------ ------------- ------------
Borrowings at amortised cost
(i) - 25,791,724
------------------------------- ------------ ------------
Convertible note liability - 18,759,966
------------------------------- ------------ ------------
Interest due on outstanding
balance - 44,551,690
------------------------------- ------------ ------------
(i) Borrowings at amortised cost
These are payables to EPT, Unionpetro, GPN and LO Petroleum,
which all belong to the LandOcean group of companies. Interest is
charged at 6% on net balance outstanding. All payables in this note
form part of the transaction and will be written off when the
transaction completes.
Note 14: Contributed equity
Consolidated
-------------------------------------------- ----------------------------
31 December 30 June
2019 (US$) 2019 (US$)
-------------------------------------------- ------------- -------------
117,806,629 (30 June 2019: 10,243,998,615)
fully paid ordinary shares 408,769,645 407,770,469
--------------------------------------------- ------------- -------------
Share issue costs (21,044,403) (21,044,402)
--------------------------------------------- ------------- -------------
Total contributed equity 387,725,242 386,726,067
--------------------------------------------- ------------- -------------
Consolidated
-------------------------------------- ----------------------------------
31 December 30 June
2019 2019
Number Number
-------------------------------------- ----------------- ---------------
Fully Paid Ordinary Shares
--------------------------------------------------------------------------
At the beginning of reporting period 10,243,998,615 7,595,830,782
-------------------------------------- ----------------- ---------------
Shares issued during the period 1,536,599,792 2,648,167,833
-------------------------------------- ----------------- ---------------
Consolidation (11,662,791,778) -
-------------------------------------- ----------------- ---------------
Total contributed equity 117,806,629 10,243,998,615
-------------------------------------- ----------------- ---------------
Consolidated
-------------------------------------- ------------------------------
31 December 30 June
2019 2019
Number Number
-------------------------------------- -------------- --------------
Options
----------------------------------------------------------------------
At the beginning of reporting period 404,643,137 781,844,977
-------------------------------------- -------------- --------------
Options expired (367,143,136) (377,201,840)
-------------------------------------- -------------- --------------
Consolidation (37,200,001) -
-------------------------------------- -------------- --------------
Total options 300,000 404,643,137
-------------------------------------- -------------- --------------
Note 15: Related parties
There have been no significant related party transactions during
the half-year ended 31 December 2019.
No new share-based payments occurred during the half-year ended
at 31 December 2019.
Employee option plan
No options were issued during the half-year ended at 31 December
2019.
Note 16: Segmental reporting
Consolidated
------------------------------------- ----------------- -----------------------------------
31 December 30 June
2019 (US$) 2019 (US$)
------------------ ----------------- ----------------- ---------------- -----------------
117,806,629 (30 June 2019:
10,243,998,615)
fully paid ordinary shares 408,769,645 407,770,469
------------------------------------- ----------------- ---------------- -----------------
Share issue costs (21,044,403) (21,044,402)
------------------------------------- ----------------- ---------------- -----------------
Total contributed equity 387,725,242 386,726,067
------------------------------------- ----------------- ---------------- ----------------- -------------
31 December 2019 Trinidad - Oil & Trinidad - Indonesia (US$) Unallocated Total (US$)
Gas Produciton Oilfield (US$)
(US$) Services (US$)
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Segment revenue
------------------------------------------------------------------------------------------------------------
Total revenue 5,444,010 1,451,231 - - 6,895,241
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Intersegment
revenue - (1,419,652) - - (1,419,652)
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Revenue from
external
customers 5,444,010 31,579 - - 5,475,589
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Segment result
------------------------------------------------------------------------------------------------------------
Profits/(loss)
before income
tax (328,332) (8,188,066) - - (8,516,388)
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Income tax 2,014,707 984,550 - - 2,999,257
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Profit/(loss)
after income tax 1,686,385 (7,203,516) - - (5,517,131)
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Segment assets
------------------------------------------------------------------------------------------------------------
Total assets 82,769,614 22,609,411 - 2,017,191 107,396,216
31 December 2018 Trinidad - Oil & Trinidad - Indonesia (US$) Unallocated Total (US$)
Gas Produciton Oilfield (US$)
(US$) Services (US$)
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Segment revenue
------------------------------------------------------------------------------------------------------------
Total revenue 6,368,234 2,384,155 - 4,622 8,757,011
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Intersegment
revenue - (1,712,532) - - (1,712,532)
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Revenue from
external
customers 6,339,827 675,446 - - 7,015,273
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Other income 28,407 - - 4,622 33,029
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Segment result
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Profits/(loss)
before income
tax (57,474,440) (1,570,720) (6,637,545) 2,736,205 (62,946,500)
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Income tax 27,020,238 44,178 - - 27,064,416
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Profit/(loss)
after income tax (30,454,202) (1,526,542) (6,637,545) 2,736,205 (35,882,084)
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Segment assets
------------------------------------------------------------------------------------------------------------
Total assets 82,844,555 29,742,019 - 29,091,565 114,678,139
30 June 2019 Trinidad - Oil & Trinidad - Indonesia US$ Unallocated US$ Total US$
Gas Produciton Oilfield
US$ Services US$
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Segment assets
------------------------------------------------------------------------------------------------------------
Total assets 83,609,947 24,244,249 - 797,474 108,651,670
------------------ ----------------- ----------------- ---------------- ----------------- -------------
Segment revenues and expenses are those directly attributable to
the segments and include any joint revenue and expenses where a
reasonable basis of allocation exists. Segment assets include all
assets used by a segment and consist principally of cash,
receivables, plant and equipment and exploration and development
expenditure. While most assets can be directly attributed to
individual segments, the carrying amount of certain assets used
jointly by two or more segments is allocated to the segments on a
reasonable basis. Segment liabilities consist principally of
payables, employee benefits, accrued expenses, provisions and
borrowings.
(i) Unallocated assets
31 December 30 June
2019
(US$) 2019
(US$)
-------------------------- ------------ --------
Cash 1,689,584 797,474
-------------------------- ------------ --------
Other 327,607 -
-------------------------- ------------ --------
Total unallocated assets 2,017,191 797,474
-------------------------- ------------ --------
Intersegment transfers
Segment revenues, expenses and results do not include any
transfers between segments. Other unallocated assets relate to
assets of Star Phoenix and Star Phoenix Group UK Ltd.
Note 17: Events after the reporting date
Drilling rigs sale termination
The buyer failed to provide Star Phoenix Group with the agreed
cash consideration for the sale of four drilling rigs and related
equipment and a decision was taken to terminate the transaction
with the buyer. Star Phoenix commenced a new sale process for the
drilling rigs and related equipment.
RRTL sale / debt restructuring
The Company and LandOcean signed an agreement in relation to the
US$1 million cash consideration (the "Payment") by LandOcean. The
parties have agreed an extension to the Payment on a rolling basis,
subject to late fees of 8% interest per annum, calculated daily
from 12 February 2020 until the date the Payment (and any accrued
interest) is received by the Company.
Subsequent to the period end, the Company received additional
US$0.5 million cash consideration from LandOcean. The remaining
US$0.5 million plus late fees of 8% interest per annum, calculated
daily from 12 February 2020 are expected to be paid by the end of
March 2020. The final US$1 million will be paid within five
business days of the completion date.
The Company also advised that all key conditions for completion
of the SPA have been successfully completed.
Subscription agreement
The Company signed a subscription agreement with a new investor
(the "Investor"), for new ordinary shares to raise approximately
GBP520,000 (the "Subscription"). Pursuant to the Subscription, the
Company will issue 23,561,326 new ordinary shares (the
"Subscription Shares") at a price of 2.21 pence per new ordinary
share.
As part of the Subscription, the investor can nominate up to two
non-executive directors to the Board of the Company and shall
retain this ability for so long as it holds 10% or more of the
Company's shares in issue. Any director appointment will be subject
to the satisfactory completion of regulatory due diligence
checks.
On 26 February 2020, the Company was advised by the Investor of
the continued delays it was experiencing with its bank. The Company
agreed to provide a further extension to 31 March 2020, subject to
a late fee payment of 8% per annum, calculated daily from 7
February 2020 until the date the funds (and any accrued interest)
are actually received into the Company's account, in any event by
no later than 31 March 2020.
Acquisition of a related party entity
The Company signed a share purchase agreement to acquire 100% of
Shanghai AusQuality International Trading Co. Ltd a Company
incorporated under the laws of the People's Republic of China for
AU$20,000. Mr Lubing Liu, the Company's Executive Director held 50%
of the shares previously. Shanghai AusQuality International Trading
Co. Ltd holds no assets or liabilities.
Trinidad Tax Appeals
Subsequent to the period end, the Company provided an update in
relation to the ongoing tax appeal matters that its Trinidad
subsidiary Range Resources Trinidad Limited ("RRTL") is involved
in. Two of the appeals were heard by the Tax Appeal Board in
Trinidad on 9 March 2020 and have now been set for trial on 26 and
27 May 2020. There are no other changes to report on Trinidad tax
appeals. Two further tax appeal cases have been scheduled for
hearing on 26 May 2020.
Director's Declaration
The directors of the company declare that:
The financial statements, comprising the consolidated statement
of profit or loss and other comprehensive income, consolidated
statement of financial position, consolidated statement of cash
flows, consolidated statement of changes in equity, accompanying
notes, are in accordance with the Corporations Act 2001 and:
a) comply with Accounting Standard AASB 134 Interim Financial
Reporting, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
b) give a true and fair view of the consolidated entity's
financial position as at 31 December 2019 and of its performance
for the half-year ended on that date.
In the Directors' opinion there are reasonable grounds to
believe that the Company will be able to pay its debts as and when
they become due and payable.
This declaration is made in accordance with a resolution of the
Board of Directors and is signed for and on behalf of the directors
by:
Zhiwei Gu
Chairman
13 March 2020
Independent Audit Report to the Members of Star Phoenix Group
Ltd
<Intentionally left blank>
Independent Audit Report to the Members of Star Phoenix Group
Ltd
<Intentionally left blank>
Independent Audit Report to the Members of Star Phoenix Group
Ltd
<Intentionally left blank>
Corporate Directory
Directors Zhiwei Gu Executive Chairman
---------- ---------------------------
Lubing Liu Executive Director and COO
---------- ----------- ---------------------------
Mu Luo Non-Executive Director
---------- ----------- ---------------------------
Company Secretary Evgenia Bezruchko and Sara Kelly
------------------------- -------------------------------------------------
Registered office c/o Edwards Mac Scovell, Level 7, 140 St Georges
& principal place Terrace
of business Perth WA 6000, Australia
Telephone: +61 8 6205 3012
------------------------- -------------------------------------------------
Share Registry Computershare Investor Services Pty Ltd
(Australia) Level 11, 172 St Georges Terrace, Perth WA
6000
Telephone: +61 3 9415 4000
------------------------- -------------------------------------------------
Share Registry Computershare Investor Services plc
(United Kingdom) PO Box 82, The Pavilions, Bridgwater Road,
Bristol, UK BS99 6ZZ
Telephone: +44 370 702 0000
------------------------- -------------------------------------------------
Auditor BDO Audit (WA) Pty Ltd, 38 Station Street,
Subiaco WA 6008, Australia
------------------------- -------------------------------------------------
Stock Exchange Star Phoenix Group Ltd shares are listed on
Listing the Alternative Investment Market (AIM) of
the London Stock Exchange (AIM code: STA)
------------------------- -------------------------------------------------
Country of Incorporation Australia
------------------------- -------------------------------------------------
Website www.starphoenixgroup.com
------------------------- -------------------------------------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR ZELFFBXLLBBB
(END) Dow Jones Newswires
March 16, 2020 03:00 ET (07:00 GMT)
Star Phoenix (LSE:STA)
Historical Stock Chart
From Jun 2024 to Jul 2024
Star Phoenix (LSE:STA)
Historical Stock Chart
From Jul 2023 to Jul 2024
