TIDMUOG
RNS Number : 1401N
United Oil & Gas PLC
28 September 2021
28 September 2021 Registered number: 09624969
United Oil and Gas Plc
("United" "the Group" or the "Company")
Interim Results for the Half Year to 30 June 2021
United Oil & Gas PLC (AIM: "UOG"), the growing oil and gas
company with a portfolio of production, development, exploration
and appraisal assets is pleased to announce its unaudited financial
and operating results for the half year ended 30 June 2021.
Brian Larkin, Chief Executive Officer commented:
"During the first half of 2021 three successful wells were
drilled on Abu Sennan and the Company reached record working
interest production of 2,730 boepd, delivering strong operational
cashflow."
"The success that we enjoyed earlier in the year has led to two
additional wells being added to the 2021 programme; the recent
positive ASX-1X well and the new Al Jahraa 13 development well due
to be drilled later this year."
"As part of the long-term objective to realise the full
potential of Abu Sennan, we are pleased to be planning the drilling
programme with our partners for 2022 and beyond. This plan will
include multiple development and exploration wells and has the
potential to deliver large reserve and production upside."
"In addition, during the period, the Company has completed a
portfolio review, refocusing United around its low risk, high
return production business, complemented by selected high impact
exploration opportunities."
"With a production portfolio delivering strong operational
cashflow, and multiple organic growth opportunities available, the
Company is well placed to capitalise on new opportunities emerging
across the industry both organic and external. We look forward to
the remainder of the year."
Year to date summary
Strategic
-- Portfolio review completed refocusing United into a low-cost,
low risk production business in Egypt and the Greater Mediterranean
area complemented by selected high impact exploration opportunities
in the Caribbean and Latin America
-- Divestments of non-core assets in UK CNS and Italy signed
post period end in line with the Company's strategy to reinvest the
proceeds to support growth;
- Signed conditional SPA for sale of Italian interests for EUR2.165m (c. $2.54m)
- Signed conditional SPA for the sale of UK Central North Sea
Licences for a consideration of up to GBP3.2m (c $4.4m)
-- Long-term plan in Egypt to realise full potential of the Abu Sennan licence
- Indicative long term drilling programme starting with four wells in 2022
- Potential to deliver large reserves, production and exploration upside
-- In Jamaica, t he formal farm-out campaign for the Walton
Morant licence, which commenced in early April continues
- A ctively working to achieve the best path forward for this exciting high-impact asset
-- Clear ESG focus and actions including evaluation of emissions
baseline in Egypt and contributions to social investment
programmes
-- Continued evaluation of new business opportunities to grow
the business in line with our strategy
1H 2021 Operational summary
-- Group working interest 1H 2021 production averaged 2,730 boepd (1H 2020: 1,975 boepd )(1)
-- Highly successful ongoing drilling campaign on the Abu Sennan licence
- ASH-3 Development well came on stream in March 2021 at a gross rate of over 4,000 boepd
- ASD-1X Exploration well delivered a commercial discovery in
May with gross rate of over 1,200 boepd achieved on test.
Development lease and commencement announced in late May with the
well coming on production less than two months from discovery and
producing an average of 600 bopd gross in the second quarter.
- AJ-8 Development well (post period end) encountered over 40m
net pay across three reservoir units and was immediately brought
into production at an initial rate of 950 boepd
- ASX-1X Exploration well encountered at least 10m of net pay in
a number of oil-bearing reservoirs (post period end)
-- Post-period end, United revised its full year guidance for
the Abu Sennan licence to 2,100-2,300 boepd in early September.
This was due to increased water cut in the wells in the ASH field.
Following investigative processes during August, the water-cut and
production from the ASH wells has stabilised . The wells are being
closely monitored and further interventions are being
considered.
-- Zero Lost time incidents, Medical Treatment Injury,
Restricted Work Injury, Spills, fires or environmental
incidents
1H 2021 Financial summary
-- Group Revenue for H1 2021 of $10.2m (H1 2020: $2.4m)(1)
-- Gross Profit of $5.7m (H1 2020: $0.3m)
-- Profit after Tax $2.0m (H1 2020: $1.8m)
-- Realised oil price of $63.10/bbl (H1 2020: $28.26/bbl)(1)
-- Cash collections in the six-month period of $8.2m (H1 2020:$3.6m)(1)
-- Cash operating costs of $4.61 /boe (H1 2020: $4.38/boe)(1)
-- Repayments on BP Pre-payment facility $2.4m (H1 2020: $0.7m)(1)
-- Group Cash balance of $2.0m at the period end (H1 2020: $1.2m)
(1) From the completion of Rockhopper Egypt acquisition to
period end, 28 February 2020 to 30 June 2020.
Outlook and Guidance
-- Continued focus on capital allocation to support low-cost
production and selected high impact exploration opportunities
-- Group working interest production in Egypt is forecasted to
average between 2,100-2,300 boepd for the full year as announced on
6 September 2021
-- Group cash capital expenditure for the full year is
forecasted to be $7.5-8.0m, fully funded from existing operations,
with $7m to be invested in our low-cost production business and up
to $1m across the other assets in the portfolio
-- Preliminary four well 2022 drilling campaign planned and
longer-term plans for accessing the significant upside reserves and
production potential of Abu Sennan under discussion with
partners
-- Test results for ASX-1X exploration which has encountered
>10m net pay in a number of oil bearing resevoirs. Evaluation of
the ASX-1X well-data is continuing, and a comprehensive testing
programme for the well is planned.
-- New development well, Al Jahraa-13, has been added to the
2021 drilling campaign. This follows on from the success that was
achieved at Al Jahraa-8
-- $5.2m of upfront consideration for portfolio management
transactions expected following completion of UK Central North Sea
and Selva transactions plus an update on timing of receipt of
$2.85m Crown milestone from Hibiscus Petroleum is expected before
the year end
-- In Jamaica, t he formal farm-out campaign for the Walton
Morant licence, which commenced in early April continues. The
market environment for exploration remains challenging, and United
are actively working to achieve the best path forward for this
exciting high-impact asset. We look forward to further positive
engagement with the Government of Jamaica to ensure the investment
cycle has time to recover.
-- With a production portfolio delivering strong operational
cashflow, and multiple organic growth opportunities available, the
Company looks forward to completing our divestments, working with
partners on the realising the upside potential in the Abu Sennan
licence and is well placed to capitalise on new opportunities
emerging across the industry.
Events today
Management are hosting a call today at 0900 BST for analysts.
For dial in details please contact Tessa Gough-Allen at Camarco
0203 781 9245 or tessa.gough-allen@camarco.co.uk
A shareholder call will take place at 1130 BST today. Should
investors wish to participate in the event, please click on this
link to register https://bit.ly/39AUHBi
Confirmation email with the details of the dialling in process
will be sent to your email address.
A presentation will be available today on www.uogplc.com.
Enquiries
For further information please visit the Company's website at
www.uogplc.com or contact:
United Oil & Gas Plc (Company)
Brian Larkin, CEO brian.larkin@uogplc.com
Sharan Dhami, Head of IR & ESG sharan.dhami@uogplc.com
Beaumont Cornish Limited (Nominated
Adviser) +44 (0) 20 7628 3396
Roland Cornish and Felicity Geidt
Optiva Securities Limited (Broker) +44 (0) 20 3137 1902
Christian Dennis
Murray (PR Advisor) +353 (0) 87 6909735
Joe Heron jheron@murrayconsultants.ie
Camarco (Financial PR/IR) +44 (0) 20 3757 4983
Billy Clegg | James Crothers | Tessa uog@camarco.co.uk
Gough-Allen
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Notes to Editors
United Oil & Gas is a high growth oil and gas company with a
portfolio of low-risk, cash generative production, development,
appraisal and exploration assets across Egypt, UK, Italy and a high
impact exploration licence in Jamaica.
The business is led by an experienced management team with a
strong track record of growing full cycle businesses, partnered
with established industry players and is well positioned to deliver
future growth through portfolio optimisation and targeted
acquisitions.
United Oil & Gas is listed on the AIM market of the London
Stock Exchange. For further information on United Oil and Gas
please visit www.uogplc.com
Chief Executive's Report
United has had a strong start to 2021. On the Abu Sennan licence
we have had multiple successes which have increased 1H 2021 average
working interest production to 2,730 boepd, delivering positive
operational cashflow. The successful drilling campaign during the
period included two development wells: ASH-3 and Al Jahraa-8
(AJ-8), the successful ASD - 1X exploration well and the work over
of the ASH-1ST2 well.
As a result of the successful drilling program in 2021 to date,
the joint venture ("JV") partners added an exploration well and a
further development well to the 2021 drilling programme. This is
testament to the confidence the JV partners have in the asset and
in the outlook for commodity prices. The ASX-1 exploration well,
near the commercial discovery at ASD-1X, was added to the Egyptian
2021 drilling programme. The well encountered at least 10m of net
pay and is now being tested. The Al Jahraa-13 development well, has
also been added to the 2021 drilling campaign. This follows on from
the success that was achieved at Al Jahraa-8 and is anticipated to
drilled by the end of the year. By the end of 2021 five wells will
have been drilled, all these wells and the 2021 work programme will
have been fully funded from our operating cash flow.
In September, United revised its full year production guidance
for the Abu Sennan licence from 2,500-2,700 to 2,100-2,300 boepd
net. This was due to wells in the ASH field producing a higher
proportion of water to oil ("water-cut"). The ASH-2 well increased
water-cut at a faster rate than the other two wells reducing
production from the ASH field. The JV partners initially performed
a number of operations to investigate options for controlling the
water-cut and stabilising production. The wells remain under
continuous observation and since the end of August water-cut from
the ASH wells has stabilised.
United will continue to work closely with the operator to ensure
that production from the field is optimised. The other six fields
on the Abu Sennan licence are entirely unaffected by this and are
producing in line with our expectations. Since the transaction to
acquire the Egyptian assets completed in February 2020 the JV
partners have demonstrated potential from Abu Sennan by drilling
five successful wells to date and increasing production. We are
working with our JV partners to maximise value from the prospects
and leads in the Abu Sennan licence and recently met with the
operator to discuss the long-term drilling programme which is
expected to start with four wells in 2022. The JV partners are
aligned on realising the full potential of the Abu Sennan licence
which has the potential to deliver large reserves, production and
exploration upside.
Our goal is to utilise our relationships and influence as a JV
partner and our role in the Joint Operating companies to be a
responsible and positive presence in the areas in which we operate.
We will continue to add value for stakeholders including host
countries, local communities, employees, contractors and
shareholders.
Safety will always be of the highest priority within the
business and, I am pleased to report that during the period our
joint operations have achieved an excellent record of safety in
Egypt with zero Lost time incidents, Medical Treatment Injury,
Restricted Work Injury, Spills, fires or environmental incidents.
We will work with our JV partners to continue this success in
Egypt.
The Walton Morant Licence in Jamaica is our high impact
exploration asset which contains over 2.4 billion barrels unrisked
mean prospective resources identified across the licence area,
while the drill-ready, high-impact Colibri prospect alone contains
mean prospective resources of 406 mmbbls . We are actively working
to achieve the best path forward for this exciting high-impact
asset We announced a formal farm-out process to bring in a
partner(s) seeking to join us in unlocking the potential in the
Walton Morant licence. We maintain regular contact with the
Government of Jamaica and w e look forward to further positive
engagement to ensure the investment cycle has time to recover.
Over the last two years the balance sheet has grown
substantially. We carried out a review of the portfolio and
identified assets that were no longer part of our core focus. As
part of this portfolio optimisation, we recently announced the
proposed divestments of our UK CNS and Italian assets. Capital
raised from these divestments will be invested back into the
business and allocated for future growth investment.
We continue to evaluate new ventures emerging across the
industry. We have very strict investment criteria validated with
the acquisition of the Abu Sennan licence. We intend to pursue
opportunities if they are in the best interest of our shareholders
and stakeholders and that add value to our high-quality
portfolio.
The business is well placed to benefit from rising commodity
prices but is also well hedged to protect against volatility. We
are growing the business through organic growth funded from free
cashflow and look to also seeking opportunities to grow the
business through M&A.
We have a business that has;
- Low-cost and risk production, development and exploration interests
- One of the of the most competitive low operating cost production bases
- Vast potential for growth from our Egyptian assets and organic
growth from operating cash flow
- JV partner alignment on maximising value from Egyptian assets
- A high impact, exploration asset in Jamaica
- Strict capital allocation and proportional spend on production and exploration
- Managed risk across the portfolio- a growing producing business with some exploration
- Committed to partnering with our host communities and nations
- Committed to operating to highest environmental and regulatory standards
- Investing in sustainable production practices to reduce our environmental impact
- An experienced Board and management team capable of
identifying and executing new opportunities
- Committed to ethical conduct following our corporate governance framework
Our strategy is to continue to grow our full cycle portfolio of
low-risk production, development and exploration assets
complemented by selected higher risk, low-cost and high impact
exploration opportunities. We want to create a business that has
sustainable growth and that creates value for all stakeholders
by;
- Creating and maximising value from our Egypt assets
- Portfolio optimisation - divesting non-core assets and
reinvesting proceeds into growing the business
- Growing sustainably both organically and through M&A
opportunities; M&A will focus on additional barrels and
production
- Funding these from growing our current production base and in
turn balance sheet strength, from our current assets, and capital
from divested assets. Increasing production gives further
optionality on growing the business
For the remainder of 2021, we look forward to the test results
of the ASX-1X well, spudding the Al Jahraa--13 development well and
working on the completion of our divestments. We have recently
appointed a new Head of Investor Relations and ESG to increase our
focus on shareholder and stakeholder management. With restrictions
easing we look forward to engaging with all our stakeholders face
to face as government directives allow. I would also like to thank
our shareholder and stakeholders for their continued support. Our
team are energised and focussed to deliver value from our assets.
The success of the company has been built as a result of a great
deal of hard work and I would like to thank all our staff for their
effort and contribution to our achievements this year.
Brian Larkin
Chief Executive Officer
28 September 2021
Operational Review
The first half of 2021 has been another strong six months in
terms of operational performance. At Abu Sennan during the first
half of 2021 three successful wells were drilled and record-high
production levels of 2,730 boepd net (1H 2020: 1,975 boepd), were
achieved.
There are seven fields in the Abu Sennan license. One of these
fields, ASH, currently has three wells in production, and since the
beginning of 2020 has performed exceptionally. As announced on the
6 September 2021, the water-cut increased on all three producing
ASH wells, particularly on ASH-2, where it increased at a faster
rate than expected. The increase in water-cut had been accompanied
by an associated drop in production from the ASH field and led us
to revise the Group's full-year guidance to 2,100-2,300 boepd. The
joint venture (JV) partners have performed a number of operations
to investigate options for controlling the water-cut and
stabilising production. Since the end of August, the ASH wells have
been left to flow on a constrained choke and encouragingly, both
the water-cut and the production from the wells has stabilised.
In Jamaica, it has been encouraging to see the positive impact
of our continuing technical evaluation, and to launch a farm-down
process on the back of the results of that work, which has received
interest from a number of companies. With the current phase of the
licence due to expire at the end of January 2022, we are actively
working to achieve the best path forward for this exciting
high-impact asset.
Egypt (22% working interest, non-operated)
Egypt Production
Production for 1H 2021 from the Abu Sennan licence net to the
Group's working interest averaged 2,730 boepd. The Group's full
year production guidance was subsequently revised to 2,100-2,300
boepd in early September.
The first half of the year saw three successful wells being
drilled on the Abu Sennan licence, as well as a number of planned
workovers. Given this activity, and the success that we have seen
from the drilling, production numbers moved positively in the first
half of the year. In Q2 we saw record production highs for the
asset, with net production averaging 2,937 boepd for the quarter -
an increase of 17% compared to Q1 - and continuing the upward trend
in production we have seen since acquiring the asset. This led to
H1 2021 working interest average production of 2,730 boepd, of
which c. 18% is gas.
Operational Activity Summary
Drilling re-commenced on the Abu Sennan licence at the beginning
of 2021, with the ASH-3 development well. This was drilled into an
area in the north of the ASH field, and after encountering over 27m
of net pay in the targeted AEB reservoir, the well was tested and
brought onstream at over 4,000 boepd gross (880 boepd net to
United) in early March.
The contracted EDC-50 rig then moved to the north of the licence
to drill the ASD-1X exploration target. This well targeted multiple
reservoirs and after encountering 22m of net pay across four
intervals (ARC, ARE, Lower Bahariya & Kharita), a commercial
discovery was announced on 4 May, with gross rates of over 1,200
bopd achieved on test. Development lease approval and commencement
of production occurred on 26 May, with the well averaging over 600
bopd (132 bopd net to United) to the end of June. The well was
brought into production within two months from initial
discovery.
The third well in the drilling programme was the Al Jahraa-8
development well, which spudded on the 2 May. This was a deviated
well targeting multiple Abu Roash and Bahariya reservoirs in an
undrained area of the Al Jahraa field. The results of this well
were reported post-period (19 July) with preliminary results
indicating it encountered over 40m of net oil pay across three
different reservoir units - including over 30m of net pay in the
Upper and Lower Bahariya reservoirs, significantly above pre-drill
expectations. The well has now been completed in the Lower
Bahariya, which on initial testing flowed at a maximum rate of
2,093 bopd and 3.63 mmscf/d (c. 2,819 boepd gross; 620 boepd net)
on a 64/64" choke; and a rate of 1,189 bopd and 1.22 mmscf/d (c.
1,433 boepd gross; 315 boepd net) on a more constrained 26/64"
choke. The well is now on production, and at the beginning of
September was flowing at 977 boepd gross.
Given the success to date from the 2021 drilling campaign, the
JV was encouraged to add an additional exploration well (ASX-1X) to
the drilling schedule, which spud on the 14 August. This is located
c. 7km to the north of the Al Jahraa field and is a similar
structure to the nearby discovery that was made at ASD-1X. As
announced on the 21 September the ASX-1X exploration well
encountered at least 10m of net pay. Evaluation of the well data is
continuing, and a comprehensive plan for testing and completing the
well is now planned. If successful, this will be followed by an
application to EGPC for a development lease .
Forward Plans
We are working with our JV partners to maximise value from the
prospects and leads in the Abu Sennan licence and recently met with
the operator to discuss the long-term drilling programme which is
expected to start with four wells in 2022. The JV partners are
aligned on realising the full potential of the Abu Sennan licence
which has the potential to deliver large reserves, production and
exploration upside.
An additional development well, Al Jahraa-13, has been added to
the 2021 drilling campaign. This follows on from the success that
was achieved at Al Jahraa-8 and will target the Upper and Lower
Bahariya reservoirs within the Al Jahraa field. We are already in
discussions within the operator on longer-term plans to realise the
significant potential of the Abu Sennan licence, resulting in an
indicative four well 2022 drilling campaign. The potential being
targeted lies both within the existing fields, and in the
identified exploration prospects. In the existing fields, 2022
drilling will focus on development targets and candidates for water
injection to boost recovery at Al Jahraa, ASH and ASD with the aim
of maturing the 7 .6 mmboe of net WI 3P reserves. The first
exploration target is currently planned to be the ASF-1X structure,
located c. 15km to the south-west of the ASH Field, which will
build on our knowledge from the ASH Field, and target multiple Abu
Roash, Bahariya and AEB targets. We are also keen to drill
additional exploration targets, with unrisked mid case resources of
5.7 mmboe net and possible unrisked upside of up to 12.7 mmboe net,
clearly representing a substantial value opportunity.
Jamaica (100% working interest)
The Jamaica asset is a high-impact frontier exploration licence.
Our work on updating the regional source rock story, quantifying
the basin-wide potential, and running economics based on an
independent assessment of viable development options for the
high-graded Colibri prospect and the costs associated with them was
completed in Q1 2021. Following this, the formal farm-out campaign
for the Walton Morant licence commenced in early April. The Walton
Morant Licence in Jamaica contains over 2.4 billion barrels
unrisked mean prospective resources identified across the licence
area, while the drill-ready, high-impact Colibri prospect alone
contains mean prospective resources of 406mmbbls. We are actively
working to achieve the best path forward for this exciting
high-impact asset.
Italy (20% working interest, non-operator)
In April the Italian Government granted Environmental approval
for the development of the Selva natural gas field concession - a
key milestone on the road to achieving first gas. Progress is
continuing to be made on obtaining the required construction
permits, and first gas is expected from the field in 2022.
In August (post-period) a Sales and Purchase Agreement (SPA),
was signed with a subsidiary of Prospex Energy PLC, for the sale of
100% of the share capital of UOG Italia Srl for a consideration of
EUR2.165 million in cash (c $2.54m). Under the terms of the SPA,
the Company received an immediate deposit payment of EUR108,235.
The remainder of the consideration is payable on completion which
is progressing .
UK
CNS (100% working interests)
In the UK Central North Sea, H1 2021 saw progress made on the
work programmes associated with the licences: new seismic data was
purchased and interpreted, with the initial mapping providing
positive indications on the existing Maria, Brochel and Maol
discoveries, and on the identified prospectivity, including Zeta,
Dunvegan, and the deeper Jurassic targets.
Post-period end, in August, a binding SPA was signed to sell
United's UK Central North Sea Licences P2480 and P2519 to Quattro
Energy Limited for a headline consideration of up to GBP3.2 million
(c. US $4.4 million). Completion is expected during Q4-2021.
Waddock Cross (26.25% working interest, non-operator)
The operator has engaged with a third party who are currently
working on finalising the well design, facilities specification,
and commercial modelling for a possible phased redevelopment of the
shut-in Waddock Cross oil field with the Operator indicating a
Final Investment Decision is expected to be made by the end of
2021.
Crown
On 12 December 2019, Anasuria Hibiscus ("AHUK") completed the
acquisition of 100% interest in the named blocks from United and
Swift Exploration Limited ("Swift Exploration") for a total cash
consideration of up to US$5 million, to be paid based on a series
of planning milestones and production targets.
A payment of US$1m was received from Anasuria Hibiscus on
completion in December 2019. A payment of US$3m (US$2.85m to
United) is due to be paid within 7 days of the actual date of
approval of the Marigold Field Development Plan ("FDP"), which
includes the development of the Crown discovery as part of the
overall Marigold development ("FDP Approval"), by the UK's Oil and
Gas Authority ("OGA").
In January the OGA requested that the AHUK seek to work with
Ithaca Energy Limited , holder of the P2158 Block 15/18b, which is
adjacent to the Marigold field and contains the Yeoman discovery
and propose a common development solution for the resources found
in both licence Ithaca and AHUK have agreed to jointly develop the
reserves in Marigold.
The joint development concept decision is expected later this
year and update on the payment timing will be provided once that
decision has been made.
Financial Review
Finance strategy
Our financial strategy underpins the business strategy of the
Group and is based upon the investment and safeguarding of capital
to optimally manage our assets and enhance shareholder value. The
core areas of the financial strategy are maintaining a balanced
capital structure, disciplined capital allocation, portfolio
management delivery and managing commodity price risk all leading
in turn to delivering free cashflow.
Highlights
1H 2021 1H 2020
Net Average Production 2,730 boepd 1,975 boepd
volumes (boepd)
------------ ------------
Oil Price Realised
($/bbl) $63.10 $28.26
------------ ------------
Revenue(1) $10.2m $2.4m(2)
------------ ------------
Gross Profit $5.7m $0.3m
------------ ------------
Profit after Tax $2.0m $1.8m
------------ ------------
Cash from Operating
Activities $6.3m $0.6m
------------ ------------
Capital Expenditure $4.3m $2.0m
------------ ------------
Debt Repayments $2.4m $0.7m (2)
------------ ------------
Cash Operating Cost
per boe $4.61 $4.36
------------ ------------
(1) 22% working interest stated net of government take
(2) From the completion of Rockhopper Egypt acquisition to
period end, 28 February 2020 to 30 June 2020
Group Production and Commodity Prices
Total group working interest production for H1-2021 four months
was 2,730 boepd. The average realised oil price was $63.10/bbl and
the average realised gas price was $2.61/mmbtu.
Group Operating costs, Depreciation, Depletion &
Amortisation ("DD&A"), and expenses
Cash Operating costs amounted to $4.61/boe.
DD&A charges on production and development assets amounted
to $2.2m
Derivative Financial Instrument
The Company's pre-payment facility with BP provides downside
price protection by effectively hedging 6,609 bbls of oil per month
from March 2020 through to September 2022. During 2020 three months
volumes were deferred until the final year of the facility. During
the period to 30 June 2021, a fair value loss has been recognised
as a result of oil price movements in the period.
Exploration Costs
There were no exploration costs written off in the period; $237k
has been spent assessing New Venture activities and has been
expensed as these costs are pre-licence.
Impairment
There were no impairment triggers in the period
Taxation
In Egypt under the terms of the Production Sharing Agreement all
corporate taxes are paid by EGPC who receive production
entitlements from the licence.
Capital Expenditure
Total capital expenditure incurred in the period (including
internal costs) on continuing operations amounted to $4.3m. Of this
total $2.6m was spent on a three well drilling campaign in Egypt,
namely the ASH 3 and AJ 8 development wells and the ASD 1X
exploration well. An additional $1.1m was invested in other capital
projects including workovers and facilities upgrades. Elsewhere,
$0.6m was invested in capital projects across the remainder of the
portfolio on our Jamaican , Italian and North Sea exploration
assets.
CONSOLIDATED INCOME STATEMENT
Period ended 30 June 2021
Note Period Period Year ended
ended ended 31 December
30 June 30 June 2020
2021 2020
Unaudited Unaudited Audited
$ $ $
Revenue 10,213,771 2,435,922 9,053,657
Cost of sales 5 (4,538,696) (2,170,599) (6,505,011)
------------ ------------ --------------
Gross profit 5,675,075 265,323 2,548,646
--------------------------------------- ----- ------------ ------------ --------------
Exploration and New Venture
write offs (236,832) (26,981) (37,161)
Other administrative expenses (1,088,023) (578,107) (1,707,168)
--------------------------------------- ----- ------------ ------------ --------------
Total administrative expenses (1,324,854) (605,088) (1,744,329)
Operating profit / (loss) 4,350,220 (339,765) 804,317
Fair value (loss) / gain
on derivative financial instruments (1,540,451) 2,821,715 1,572,706
Interest expense (787,987) (709,976) (1,580,842)
------------ ------------ --------------
Profit before taxation 2,021,782 1,771,974 796,181
Taxation - - 56,480
------------ ------------ --------------
Profit for the financial
period attributable to the
Company's equity shareholders 2,021,782 1,771,974 852,661
Earnings per share from continuing
operations expressed in cents
per share:
Basic 4 0.32 0.33 0.15
Diluted 4 0.30 0.33 0.14
------------ ------------ --------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Period Period Year ended
ended ended 31 December
30 June 30 June 2020
2021 2020
Unaudited Unaudited Audited
$ $ $
Profit for the financial
period 2,021,782 1,771,974 852,661
Foreign exchange movements 32,513 (279,997) (337,713)
---------- ---------- --------------
Profit for the financial
period attributable to
the Company's equity shareholders 2,054,295 1,491,977 514,948
CONSOLIDATED BALANCE SHEET
At 30 JUNE 2021
Note 30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
$ $ $
NON-CURRENT ASSETS
Intangible Assets 6 7,424,024 7,437,988 7,891,743
Property, Plant and Equipment 7 16,065,215 12,939,128 13,607,167
23,489,239 20,377,116 21,498,910
CURRENT ASSETS
Inventory 111,093 50,879 35,729
Trade and other receivables 9 7,484,842 5,253,482 5,454,307
Cash and cash equivalents 2,036,635 1,193,576 2,188,902
----------- ----------- -----------
9,632,570 6,497,397 7,678,938
TOTAL ASSETS 33,121,809 26,875,053 29,177,848
CAPITAL AND RESERVES ATTRIBUTABLE
TO EQUITY HOLDERS OF THE
COMPANY
Share capital 10 8,416,182 8,059,774 8,138,619
Share premium 10 16,215,360 15,989,999 16,047,975
Share-based payment reserve 2,101,983 1,771,218 1,922,090
Merger reserve (2,697,357) (2,697,357) (2,697,357)
Translation reserve (316,427) (291,224) (348,940)
Retained earnings (1,380,955) (2,483,424) (3,402,737)
----------- ----------- -----------
TOTAL EQUITY 22,338,786 20,348,986 19,659,650
CURRENT LIABILITIES
Trade and other payables 4,512,347 1,391,546 2,996,115
Derivative financial instruments 1,942,972 84,504 992,681
Borrowings 11 3,075,515 1,580,138 2,133,655
Current tax payable 138,084 176,903 135,388
Lease liabilities 21,358 47,541 94,050
----------- ----------- -----------
9,690,276 3,280,632 6,351,889
NON-CURRENT LIABILITIES
Borrowings 11 661,741 2,904,699 2,422,146
Derivative financial instruments 336,605 340,736 647,376
Lease liabilities 94,401 - 96,787
----------- ----------- -----------
1,092,747 3,245,435 3,166,309
TOTAL LIABILITIES 10,783,023 6,526,067 9,518,198
TOTAL EQUITY AND LIABILITIES 33,121,809 26,875,053 29,177,848
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Period ended 30 June 2021
Share-
based
Share Share payment Retained Translation Merger Total
capital premium reserve earnings reserve reserve equity
$ $ $ $ $ $ $
For the period ended
30 June 2021
Balance at 1 January
2021 8,138,619 16,047,975 1,922,090 (3,402,737) (348,940) (2,697,357) 19,659,650
Profit for the period - - - 2,021,782 - - 2,021,782
Foreign exchange
movements - - - - 32,513 - 32,513
---------- ----------- ---------- ------------ ------------ ------------ -----------
Total comprehensive
income for the period - - - 2,021,782 32,513 - 2,054,295
Contributions by
and distributions
to owners:
Share-based payments - - 179,893 - - - 179,893
Shares issued 277,563 167,385 - - - - 444,948
Total contributions
by and distributions
to owners 277,563 167,385 179,893 - - - 624,841
---------- -----------
Balance at 30 June
2021 (Unaudited) 8,416,182 16,215,360 2,101,983 (1,380,955) (316,427) (2,697,357) 22,338,786
---------- ----------- ---------- ------------ ------------ ------------ -----------
For the period ended
30 June 2020
Balance at 1 January
2020 4,564,787 9,912,988 1,591,808 (4,255,398) (11,227) (2,697,357) 9,105,601
Profit for the period - - - 1,771,974 - - 1,771,974
Foreign exchange
movements - - - - (279,997) - (279,997)
---------- ----------- ---------- ------------ ------------ ------------ -----------
Total comprehensive
income for the period - - - 1,771,974 (279,997) - 1,491,977
Contributions by
and distributions
to owners:
Share-based payments - - 118,249 - - - 118,249
Shares issued 3,494,987 6,521,815 - - - - 10,016,802
Share issue expense - (444,804) 61,161 - - - (383,643)
Total contributions
by and distributions
to owners 3,494,987 6,077,011 179,410 - - - 9,751,408
---------- -----------
Balance at 30 June
2020 (Unaudited) 8,059,774 15,989,999 1,771,218 (2,483,424) (291,224) (2,697,357) 20,348,986
---------- ------------ ------------ ------------ -----------
For the period ended
31 December 2020
Balance at 1 January
2020 4,564,787 9,912,988 1,591,808 (4,255,398) (11,227) (2,697,357) 9,105,601
Profit for the period - - - 852,661 - - 852,661
Foreign exchange
movements - - - - (337,713) - (337,713)
Total comprehensive
income for the year - - - 852,661 (337,713) - 514,948
Contributions by
and distributions
to owners:
Shares issued 3,573,832 6,640,081 - - - - 10,213,913
Share issue expenses - (505,094) 62,516 - - - (442,578)
Share-based payments - - 276,766 - - - 267,766
Balance at 31 December
2020 (Audited) 8,138,619 16,047,975 1,922,090 (3,402,737) (348,940) (2,697,357) 19,659,650
CONSOLIDATED STATEMENT OF CASHFLOWS
Period ended 30 June 2021
Period ended 30 June 2021 Period ended 30 June 2020 Year ended 31 December
2020
Unaudited Unaudited Audited
$ $ $
Cash flows from operating
activities
Profit before taxation 2,021,782 1,771,974 796,181
Adjustments for:
Share-based payments 179,893 118,249 267,766
Amortisation 2,029 - 3,862
Depreciation 2,308,395 1,113,723 2,628,990
Fair value loss/(gain) on
derivatives 1,540,451 (2,821,715) (1,572,706)
Impairment of intangible
assets - - 37,161
Gain on disposal of
intangible assets - 44,241 31,307
Loss on disposal of
property, plant and
equipment (25,683) - -
Interest expense 787,987 709,976 1,580,842
Foreign exchange movements 127,135 (105,156) (189,918)
-------------------------- -------------------------- --------------------------
6,941,989 831,292 3,625,803
(Increase) / decrease in
inventories (75,364) 49,283 64,433
(Increase) / decrease in
trade and other receivables (2,030,535) 2,730,890 2,530,065
Increase / (decrease) in
trade and other payables 1,516,232 (2,978,581) (1,390,182)
-------------------------- -------------------------- --------------------------
Net cash from operating
activities 6,352,322 632,884 4,830,119
Cash flows from investing
activities
Cash outflows on business
combination - (11,200,000) (11,200,000)
Cash acquired in business
combination - 46,543 46,543
Purchase of property, plant
& equipment (3,093,236) (1,392,505) (2,816,460)
Payments for intangible
exploration assets (1,257,093) (654,941) (1,457,307)
Net cash used in investing
activities (4,350,329) (13,200,903) (15,427,224)
Cash flows from financing
activities
Issue of ordinary shares
(net of expenses) 444,949 5,712,315 5,835,834
Proceeds on issue of swap
financing arrangement - 7,760,288 7,760,288
Repayments on swap financing
arrangement (2,292,540) (789,233) (1,666,116)
Payments on oil price
derivatives (132,632) - (70,431)
Capital payments on lease (22,159) (34,881) (73,183)
Interest paid on lease (7,984) (2,845) (5,753)
-------------------------- -------------------------- --------------------------
Net cash (used in) / from
financing activities (2,010,366) 12,645,644 11,780,639
(Decrease) / Increase in
cash and cash equivalents (8,373) 77,625 1,183,534
Cash and cash equivalents at
beginning of period / year 2,188,902 1,275,537 1,275,537
Effects of exchange rate
movements (143,894) (159,586) (270,169)
-------------------------- -------------------------- --------------------------
Cash and cash equivalents at
end of period / year 2,036,635 1,193,576 2,188,902
Notes to the financial information
Period ended 30 June 2021
1. GENERAL
The interim financial information for the period to 30 June 2021
is unaudited.
2. ACCOUNTING POLICIES
The interim financial information in this report has been
prepared on the basis of the accounting policies set out in the
audited financial statements for the period ended 31 December 2020,
which complied with International Financial Reporting Standards as
adopted for use in the European Union ("IFRS").
IFRS is subject to amendment and interpretation by the
International Accounting Standards Board ("IASB") and the IFRS
Interpretations Committee and there is an on-going process of
review and endorsement by the European Commission.
The Directors have adopted the going concern basis in preparing
the financial information. In assessing whether the going concern
assumption is appropriate, the Directors have taken into account
all relevant available information about the foreseeable
future.
The condensed financial information for the year ended 31
December 2020 set out in this interim report does not comprise the
Group's statutory accounts as defined in section 434 of the
Companies Act 2006.
The statutory accounts for the year ended 31 December 2020,
which were prepared under IFRS, have been delivered to the
Registrar of Companies. The auditors reported on these accounts;
their report was unqualified and did not contain a statement under
section 498(2) or 498(3) of the Companies Act 2006.
Foreign currency
The Group's presentation currency is USD.
Going Concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the CEO's Statement and Directors' Report.
The Group closely monitors and carefully manages its liquidity
risk. Cash flow forecasts are regularly updated, and sensitivities
run for different scenarios, including, but not limited to, changes
in commodity price and different forecasts for the Group's
producing assets. Careful portfolio management and divestment of
non-core assets in Italy and the UK Central North Sea have recently
been announced and strengthen cashflow projections for the second
half of 2021 and the first quarter of 2022 and align with the
Group's strategy to grow its low-cost production business in Egypt,
complemented with selected high impact exploration opportunities in
the Caribbean and Latin America. The Group's Base Case forecast
sufficient financial headroom for the 12 months from approval of
its 2021 Interim Financial Statements on 28th of September
2020.
The directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the 12
months from the date of approval of its Interim Financial
Statements on 28 September 2021 therefore the directors continue to
adopt the going concern basis of accounting in preparing the
financial statements.
Revenue
Revenue comprises invoiced and accrued sales of hydrocarbons to
customers, excluding value added and similar taxes. Also disclosed
within revenue is tariff income recognised, excluding value added
and similar taxes, for gas transportation facilities provided to
third parties.
Revenue is recognised at a point in time as control passes to
the customer, which is typically the point of delivery of
hydrocarbons. The Group does not have performance obligations
subsequent to delivery.
Classification and measurement of financial liabilities
The Group's financial liabilities include borrowings, trade and
other payables and embedded derivative financial instruments.
Financial liabilities are initially measured at fair value, and,
where applicable, adjusted for transaction costs unless the Group
designated a financial liability at fair value through profit or
loss.
Subsequently, financial liabilities are measured at amortised
cost using the effective interest method except for derivatives and
financial liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses recognised in
profit or loss.
All interest-related charges and, if applicable, changes in an
instrument's fair value that are reported in profit or loss are
included within finance costs or fair value gains/(losses) on
derivative instruments.
Embedded derivative nancial instruments
A borrowing arrangement structured as a prepaid commodity swap
with monthly repayments over 30 months has embedded in it a
derivative that is indexed to the price of the commodity. This is
considered to be a separable embedded derivative of a loan
instrument.
At the date of issue, the fair value of the embedded derivative
is estimated by considering the derivative as a series of forward
contracts with modelling of the fixed and floating legs to
determine a repayment schedule and derive a net present value for
the forward contract embedded derivative.
This amount is recognised separately as a financial liability or
financial asset and measured at fair value through the income
statement. The residual amount of the loan is then recorded as a
liability on an amortised cost basis using the effective interest
method until extinguished upon conversion or at the instrument's
maturity date.
Exploration and evaluation assets
The group accounts for oil and gas expenditure under the full
cost method of accounting.
Costs (other than payments to acquire the legal right to
explore) incurred prior to acquiring the rights to explore are
charged directly to the profit and loss account. All costs incurred
after the rights to explore an area have been obtained, such as
geological, geophysical, data costs and other direct costs of
exploration and appraisal are accumulated and capitalised as
intangible exploration and evaluation ("E&E") assets.
E&E costs are not amortised prior to the conclusion of
appraisal activities. At the completion of appraisal activities if
technical feasibility is demonstrated and commercial reserves are
discovered, then following development sanction, the carrying value
of the relevant E&E asset will be reclassified as a development
and production asset within tangible fixed assets.
If after completion of appraisal activities in an area, it is
not possible to determine technical feasibility or commercial
viability, then the costs of such unsuccessful exploration and
evaluation are impaired to the Income Statement. The costs
associated with any wells which are abandoned are fully impaired
when the abandonment decision is taken.
Development and production assets are accumulated generally on a
field by-field basis and represent the costs of developing the
commercial reserves discovered and bringing them into production,
together with the E&E expenditures incurred in finding
commercial reserves which have been transferred from intangible
E&E assets.
The net book values of development and production assets are
depreciated generally on a field-by field basis using the unit of
production method based on the commercial proven and probable
reserves. Assets are not depreciated until production
commences.
Depreciation of production assets
Production assets are accumulated into cash generating units
(CGUs) and the net book values are depreciated using the
unit-of-production method by reference to the ratio of production
in the year and the related economic commercial reserves, taking
into account future development expenditures necessary to bring
those reserves into production.
The gain or loss arising on disposal or scrapping of an asset is
determined as the difference between the sales proceeds, net of
selling costs, and the carrying amount of the asset and is
recognised in the income statement.
Each asset's estimated useful life has been assessed with regard
to both its own physical life limitations and the present
assessment of economically recoverable reserves of the oil and gas
asset at which the item is located, and to possible future
variations in those assessments. Estimates of remaining useful
lives are made on a regular basis for all oil and gas assets,
machinery and equipment, with annual reassessments for major items.
Changes in estimates which affect unit production calculations are
accounted for prospectively.
3. RELATED PARTY TRANSACTIONS
The directors are considered to be the key management personnel
of the company. During the interim period, the company paid fees to
executive and non-executive directors amounting to $619,989 (Period
ended 30 June 2020 - $273,920).
Brian Larkin and Jonathan Leather, both directors of the
company, have exercised 9,755,690 and 4,877,810 warrants
respectively during the period at an exercise price of 1.42857p,
effective 17 May 2021.
Thomas Hickey, a non-executive director was awarded 1,342,282
share options in the company at an exercise price of 2.98p and have
a 3-year vesting period from date of grant, effective 4 January
2021.
4. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings per share amounts are calculated by dividing
net profit for the period attributable to ordinary equity holders
of the Parent by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of
dilutive ordinary shares that would be issued if share options or
warrants were converted into ordinary shares .
Basic and diluted loss per share
Period ended Period ended Year ended
30 June 2021 30 June 2020 31 December 2020
Profit for the period ($) 2,021,782 1,771,974 852,661
Weighted average number of ordinary shares for the purposes
of basic earnings per share(number) 630,039,328 531,981,886 578,248,726
Dilutive shares 38,575,000 - 23,207,377
Weighted average number of ordinary shares for the purposes
of diluted earnings per share(number) 668,814,328 531,981,886 601,456,103
Basic earnings per share from continuing operations (cents
per share) 0.32 0.33 0.15
Diluted earnings per share from continuing operations (cents
per share) 0.30 0.33 0.14
============== ============== ==================
5. COST OF SALES
30-Jun-21 30-Jun-20 31-Dec-20
$ $ $
Production Operating costs 2,280,289 1,049,911 3,941,743
Depreciation, depletion and
amortisation 2,258,407 1,071,405 2,563,268
Inventories - 49,283 -
4,538,696 2,170,599 6,505,011
========== ========== ==========
6. INTANGIBLE ASSETS
Exploration Computer Total
and Evaluation software
assets
$ $ $
Cost
At 31 December 2019 7,728,138 11,383 9,596,637
Acquired in business
combinations 3,181,362 - 3,181,362
Additions 1,457,307 11,374 3,097,401
Transfer to production assets (2,538,981) - (2,538,981)
Disposals (31,307) - (31,307)
Exchange movements 335,459 1,070 336,529
At 31 December 2020 10,131,978 12,444 10,144,422
Additions 1,257,093 - 1,257,093
Transfer to production assets (1,700,706) - (1,700,706)
Exchange movements (21,836) (390) (22,226)
At 30 June 2021 9,666,527 12,056 9,678,583
Depreciation
At 31 December 2019 2,158,648 - 2,158,649
Charge for the year - 3,862 3,862
Impairment 37,161 - 37,161
Exchange movements 52,722 286 53,008
---------------- ---------- ------------
At 31 December 2020 2,248,531 4,148 2,252,679
Charge for the year - 2,029 2,029
Exchange movements - (149) (149)
---------------- ---------- ------------
At 30 June 2021 2,248,531 6,028 2,254,559
Net book value
At 31 December 2020 7,883,447 8,296 7,891,743
================ ========== ============
At 30 June 2021 7,417,996 6,028 7,424,024
================ ========== ============
At 30 June 2021, the Group's E&E carrying values of
$7,417,996 related to our high impact exploration prospects in
Jamaica, gas development Selva asset in Italy, and the UK North Sea
and Wessex basin exploration/development work programmes. All final
exploration assets held in Abu Sennan were transferred to Oil and
Gas assets upon the successful testing and bringing onstream of the
ASD 1X Well in June 2021.
Our Italian development at the Selva field continued to make
progress in 2021. Formal technical environmental approval from the
Italian Environmental Ministry was granted in January 2021 and
preliminary work has commenced on the development programme
preparing for first gas. At the Balance Sheet date, $2,667,444 had
been capitalised for this asset. Post Balance Sheet date the
company has announced the conditional sale of 100% of the share
capital of UOG Italia Srl for EUR2.165m (c $2.54m) to Prospex
Energy plc.
In August 2020, the Group was assigned Tullow Jamaica Ltd.'s 80%
equity in the Walton Morant licence meaning the company now
operates and has a 100% equity interest in the licence. The initial
exploration period was extended until 31 January 2022 when an
initial drill-or-drop decision is required. The Group continues
with a work programme to further de-risk the high-graded Colibri
prospect and perform detailed interpretation of the numerous
follow-on targets. The Company is a ctively working to achieve the
best path forward for this exciting high-impact asset in
challenging market conditions As at 30 June 2021 the Group is
carrying $3,901,877 for Jamaica in Intangible assets.
In the UK North Sea, post balance sheet date (Note 12) the
company announced the proposed sale of its UK Central North Sea
Licences P2480 and P2519 to Quattro Energy Limited for a
Consideration of up to GBP3.2m (c $4.4m), split between an initial
payment of GBP2m (c $2.7m) at completion of the transaction, and a
further GBP1.2m (c $1.7m) on Field Development Plan approval. Costs
to date on the balance sheet of $453,324 are capitalised and will
be allocated against disposal proceeds for recognition of profit on
disposal for the full year 2021 results.
The work programme continues on the Waddock Cross development
with current capitalised costs at half year of $625,553.
Management reviews the intangible exploration assets for
indications of impairment at each balance sheet date based on IFRS
6 criteria. Commercial reserves have not yet been established and
the evaluation and exploration work is ongoing. The Directors do
not consider that any indications of impairment have arisen and
accordingly the assets continue to be carried at cost.
7. PROPERTY, PLANT AND EQUIPMENT
Production Computer Fixtures Right of Total
assets equipment and fittings use asset
$ $ $ $ $
Cost
At 31 December 2019 - 8,589 - 114,775 123,364
Acquired in business combinations 10,630,944 - - 61,127 10,692,071
Transfer from E&E assets 2,538,981 - - - 2,538,981
Additions 2,806,734 6,755 2,971 204,763 3,021,223
Disposals - - - (186,700) (186,700)
Exchange movements - (1,638) - 10,799 9,161
At 31 December 2020 15,976,659 13,706 2,971 204,764 16,198,100
Transfer from E&E assets 1,700,706 - - - 1,700,706
Additions 3,093,236 - - - 3,093,236
Disposals - - - (43,862) (43,862)
Exchange movements - (428) (93) - (521)
At 30 June 2021 20,770,602 13,278 2,879 160,901 20,947,659
Depreciation
At 31 December 2019 - 5,812 - 90,830 96,642
Charge for the year 2,563,268 3,169 231 62,322 2,628,990
Disposals - - - (144,382) (144,382)
Exchange movements - (1,665) 17 11,331 9,683
----------- ----------- -------------- ----------- -----------
At 31 December 2020 2,563,268 7,316 248 20,101 2,590,933
Charge for the year 2,258,407 1,960 484 47,543 2,308,395
Disposals - - - (16,625) (16,625)
Exchange movements - (247) (12) - (259)
----------- ----------- -------------- ----------- -----------
At 30 June 2021 4,821,675 9,029 720 51,019 4,882,444
Net book value
At 31 December 2020 13,413,391 6,390 2,723 184,663 13,607,167
=========== =========== ============== =========== ===========
At 30 June 2021 15,948,926 4,249 2,159 109,881 16,065,215
=========== =========== ============== =========== ===========
All producing assets of $15,948,926 at the Balance Sheet date
relate to operations in the Abu Sennan concession in the Western
Desert of Egypt and include in 2021 the costs of both the ASH3
development well, Al Jahraa 8 development well and the successful
ASD 1X exploration well drilled in the first half of 2021.
The costs of the ASH-3 development well net to United of
$824,981, capital costs for the Al Jahraa 8 development well of
$913,231 and $1,700,706 ASD 1X exploration well costs along with
ongoing workovers and facilities costs, net of DD&A movements
of $2,258,407 make up the movement of Oil and Gas assets of
$2,535,535 in the first half of 2021.
Management reviews the tangible assets for indications of
impairment at each balance sheet date based on IFRS 6 criteria.
With the continued successful drilling results achieved in both the
ASH-3 and ASD 1X wells in the first half of 2021, and gross 2P
Reserves increasing to 15MMboe at the 2020 year end Independent CPR
review, combined with the steady increase in commodity prices since
the start of 2021, the company believe no impairment indicators are
present that would reduce the carrying value of $15.9m of PP&E
at the balance sheet date.
9. TRADE AND OTHER RECEIVABLES
30 June 2021 30 June 2020 31 December 2020
$ $ $
Trade debtors 234,629 2,077,940 -
Prepayments and deposit 7,735 - 7,984
Accrued income 4,257,664 - 2,518,794
Other tax receivables 134,815 325,542 77,529
Crown disposal proceeds due 2,850,000 2,850,000 2,850,000
------------- ------------- -----------------
7,484,842 5,253,482 5,454,307
============= ============= =================
10. SHARE CAPITAL & SHARE PREMIUM
Allotted, issued, and fully paid:
30 June 2021
Share capital Share premium
No $ $
Ordinary shares of GBP0.01 each
Opening balance 625,153,969 8,138,619 16,047,975
Allotments:
17 May Issue for cash 19,650,000 277,563 167,385
At 30 June 2021 644,803,969 8,416,182 16,215,360
30 June 2020
Share capital Share premium
No $ $
Ordinary shares of GBP0.01 each
Opening balance 345,613,985 4,564,787 9,912,988
Allotments:
28 Feb issue for business combination 114,503,817 1,463,002 2,457,843
28 Feb issue for cash 159,036,167 2,031,985 4,063,972
Share issue costs - - (444,804)
At 30 June 2020 619,153,969 8,059,774 15,989,998
31 December 2020
Share capital Share premium
No $ $
Ordinary shares of GBP0.01 each
Opening balance 345,613,985 4,564,787 9,912,988
Allotments:
28 Feb issue for business combination 114,503,817 1,463,002 2,457,843
28 Feb issue for cash 159,036,167 2,031,985 4,063,972
Shares issued for cash 6,000,000 78,843 118,266
Share issue costs - - (505,094)
At 31 December 2020 625,153,969 8,138,619 16,047,975
11. BORROWINGS AND DERIVATIVES
Summary of borrowing arrangements:
In February 2020, the Group entered into a prepaid commodity
swap arrangement for $8 million to part-finance the acquisition of
Rockhopper Egypt Pty Ltd. The funds will be repaid through 30
monthly repayments which are structured as a fixed notional amount
with variations based on movements in oil prices. Due to the price
structure, the arrangement includes an embedded derivative (a
forward contract). For financial reporting purposes, this must be
separately accounted for at fair value at each balance sheet date.
The balance of proceeds that did not relate to the derivative were
treated as the opening carrying amount of the loan which will then
be measured at amortised cost over its life, with finance charges
recognised to give an even return over the loan life and repayments
of capital allocated appropriately.
As at 30 June 2021, a fair value loss on derivative financial
instruments has been recognised as a result of oil price movements
in the period.
12. EVENTS AFTER THE BALANCE SHEET DATE
1. On 28 July 2021, the Group announced the proposed sale of its
UK Central North Sea Licences P2480 and P2519 to Quattro Energy
Limited for a Consideration of up to GBP3.2m (c $4.4m) , split
between an initial payment of GBP2m at completion of the
transaction, and a further GBP1.2m on Field Development Plan
approval. This deal, subject to the completion of due diligence and
OGA approval is expected to complete by 30 September 2021.
2. On 2 August 2021 the Group announced the successful testing
of AJ 8 Development well, Abu Sennan in the Egypt Western Desert.
Preliminary test results from the Lower Bahariya reservoir indicate
maximum flow rates if 2,093 bopd and 3.63mmscf/d (c. 620 boepd net
to United) on a 64/64" choke, and a rate of 1,189 bopd and 1.22
mmscf/d (315 boepd net) on a more constrained 26/64 " choke.
These headline test results exceeded pre-drill expectations and
the well came onstream within days of this announcement.
3. On 10 August 2021, the Group agreed the conditional Sale of
100% of the share capital of UOG Italia Srl for EUR2.165m
(c.$2.54m) to Prospex Energy plc. under the terms of the deal
United received EUR108,235 on the signing of the SPA on 10 August,
with the remainder of consideration payable on completion. This
sale is a small premium on the assets held in UOG Italia at 31
December 2020 and removes any further development expenditure
associated with the Selva development. United held a 20% interest
in the Podere Gallina licence. The sale is conditional upon the
approval of the Italian authorities to the change in control of UOG
Italia Srl, and also upon Prospex completing a fundraising process.
The transaction is expected to complete in late 2021.
4. On 21 September 2021 the Group announced the successful
testing of the ASX 1X exploration well, Abu Sennan in the Egypt
Western Desert. The well encountered at least 10m net pay in a
number of oil-bearing reservoir intervals, including the primary
reservoir targets of the Abu Roash Formation. The well came in
ahead of schedule and under-budget, and will now be tested , and if
successful, will be followed by an application to the Egyptian
General Petroleum Company (EGPC) for a development lease.
13 . COPIES OF INTERIM REPORT
Copies of the interim report are available to the public free of
charge from the Company at United Oil & Gas Plc, 200 Strand,
London, WC2R 1DJ during normal office hours, Saturdays and Sundays
excepted, for 14 days from today and are available on the Company's
website at www.uogplc.com.
Glossary
Non-IFRS measures
The Group uses certain measures of performance that are not
specifically defined under IFRS or other generally accepted
accounting principles.
Cash-operating costs per barrel
Cash operating costs are defined as cost of sales less
depreciation, depletion and amortisation, and movements in
inventories. The cash operating costs are then divided by barrels
of oil equivalent produced to demonstrate the cash cost of
producing oil and gas from the Group's producing assets .
Period Period Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
$ $ $
Cost of Sales 4,538,696 2,170,599 6,505,011
Less:
Depreciation, depletion and amortisation (2,258,407) (1,071,405) (2,563,268)
Inventories - (49,283) (64,433)
------------ ----------------------- ---------------------
Cash Operating costs 2,280,289 1,049,911 3,877,310
------------ ----------------------- ---------------------
Production (BOEPD) 2,730 1,975 2,195
------------ ----------------------- ---------------------
Cash Operating cost per BOE ($) 4.61 4.36 5.77
------------ ----------------------- ---------------------
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END
IR EAENXASKFEAA
(END) Dow Jones Newswires
September 28, 2021 02:00 ET (06:00 GMT)
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