Doriemus PLC Half-yearly Report
29 September 2014 - 1:00PM
UK Regulatory
TIDMDOR
29 September 2014
Doriemus PLC
Half-yearly results for the six month period ended 30 June 2014
I am pleased to present the interim results for the six months ended 30 June
2014.
Overview
The Company has a strong balance sheet with no debt and current assets
including cash as at 30 June 2014 amounting to GBP1,315,000 and eagerly awaits
results from the drilling of the HorseHill-1 well in the Weald Basin just north
of Gatwick Airport.
The Company has acquired three exciting investments during the year which we
believe will enhance future shareholder value.
Your board of directors will continue to seek out further investments in the UK
"conventional" oil and gas space and work closely with Angus Energy Limited on
ways of increasing our oil production from the existing operating fields.
The next financial year should see significant improvements in production at
two of Angus Energy's licences (Lidsey and Brockham) with new production wells
proposed to be drilled on both. We should also know the outcome of the Horse
Hill-1 well.
We will also continue to seek out further investments in line with the
Company's investment strategy.
The Company announced on 12 September 2014 that the disposal of TEP Exchange
("TEP"), as announced on 18 July 2014, had now completed.
This concludes the transition of the Company from the historical TEP Exchange
Group Plc, whose primary business was unsuccessful in the licensing and on-line
advertising of TEP's proprietary electronic platform, to a company with a new
focus of investing in conventional oil and gas production and exploration
activities in the UK.
This disposal technically constitutes a change of business for the purpose of
Rule 15 of the AIM Rules for Companies and therefore the Company is, with
effect from 12 September 2014, re-classified as an investing company with a
focus on natural resources.
Investments
Horse Hill Prospect:
The Company currently has a 10% equity interest in Horse Hill Development Ltd
("HHDL"), a special purpose company, which holds the rights to a 65%
participating interest and operatorship, in licences PEDL 137 and PEDL 246
onshore in the UK Weald Basin in Surrey ("Horse Hill Prospect"). Magellan
Petroleum Corporation holds the balance of 35%.
HHDL is in the process of drilling the Horse Hill-1 well to an estimated total
depth of 8,680 feet to test conventional stacked oil and gas targets. The
Marriott 50 rig started drilling on the Horse Hill Prospect, which is located
on the northern side of UK Weald Basin near Gatwick Airport, on 22 September
2014 and the drilling is scheduled to be completed during November.
On 29 September 2014, the Company advised that the Horse Hill-1 well has now
been drilled to the second casing point at 1,795 feet measured depth ("MD"),
and the setting and cementing of a 13 3/8-inch steel casing is now underway.
The bottom of the well is currently located in the upper part of the Jurassic
and the well has encountered the expected mud gas up to C3 (propane) and
mineral fluorescence just above current well depth.
Geological analysis and mud logging from rock cuttings circulated out of the
hole indicate that geological markers in the well are slightly shallower than
initially prognosed based on seismic and the nearby Collendean - 1 well drilled
by ESSO in 1964. The second casing point has been revised up from 1,865 feet MD
to reflect this.
The Horse Hill-1 well is located on the northern side of UK Weald Basin near
Gatwick Airport and is planned to drill to a Total Depth ("TD") of 8,680 feet
measured depth ("MD") to test a number of conventional oil and gas targets. The
primary oil reservoir targets in this well lie in the Jurassic Portland
Sandstone at about 2,200 feet true vertical depth below sea level ("TVD ss")
and the Corallian Sandstone at about 3,440 feet TVD ss. There are also a number
of secondary oil targets in the Jurassic aged formations, including the Great
Oolite Limestone, estimated to be at 4,530 feet TVD ss. After penetrating the
Jurassic the well will be drilled to terminal depth in order to test for
Triassic aged formations, which are expected to contain gas.
After setting the 13 3/8-inch casing, a 12 ½-inch hole will be drilled to a
depth of approximately 5,900 feet MD where open-hole electric logs will be
acquired through the prognosed oil reservoirs before setting a 9 5/8-inch
casing. Then an 8 ½-inch hole will be drilled to TD in order to test for
Triassic aged formations, which are expected to contain gas.
The Horse Hill-1 well is planned to test a number of conventional stacked oil
targets at the proven productive Portland sandstone, Corallian sandstone and
Great Oolite limestone levels. Prospective recoverable resources totalling a
mean 87 million barrels ("mmbbls") have been estimated; with an additional mean
164 billion cubic feet ("bcf") of recoverable prospective resources proposed
within the deeper Triassic gas play.
The Company further announced on 4 September 2014 that as a direct result of
drilling operations commencing at Horse Hill, HHDL additionally owns a 65%
participating interest in the adjacent United Kingdom Petroleum Exploration and
Production Licence ("PEDL") 246.
PEDL 246 covers an area of 43.58 km2 (10,769 acre) immediately east of and
adjacent to the 99.29 km2 (24,525 acre) Horse Hill PEDL 137 located in Surrey,
where the Horse Hill-1 well is currently being drilled. The transfer of the 65%
interest in PEDL 246 to HHDL from Magellan Petroleum (UK) Limited, a subsidiary
of Magellan Petroleum Corporation, is conditional only on gaining final
approval from the UK Secretary of State for Energy and Climate Change.
Brockham Oil Field (10% owned by DOR and operated by Angus Energy):
The Brockham Oil Field ("Brockham"), in the Weald Basin, is held under United
Kingdom Production Licence PL 235. Oil production is currently 55 bpod.
Brockham's 28 API oil is regularly trucked and sold to the Perenco Oil Refinery
in southern England.
Angus Energy have advised that they are still currently attending to one final
permit issue in relation to the planned 450 metre side-track well at Brockham
and will update the Company on further news. An appropriate drill rig is on
standby to undertake this side-track well, and it is planned to mobilise the
rig to site once the new mining waste permit has been issued and after
completion of drilling of the Horse Hill-1 well.
In preparation for the expected increase in oil production, post the
side-track, Angus Energy has now completed the refurbishment of the
1,200-barrel storage tank facilities.
In March 2014, the Company announced that RPS Energy Consultants Limited
("RPS") had independently assessed that, as at 31 December 2013, the Brockham
Field contains 3.62 million barrels (gross) Oil In-place (P50 best case).
Lidsey Oil Field (20% owned by DOR and operated by Angus Energy):
The Lidsey Oil Field ("Lidsey"), in the Weald Basin, is held under United
Kingdom Production Licence PL 241. Oil production is currently 30 bopd.
Lidsey has a fully permitted and operational 2,000-barrel storage facility and
its 38 API oil is regularly trucked and sold to the Perenco Oil Refinery.
In March 2014, the Company announced that RPS had independently assessed that,
as at 31 December 2013, the Lidsey Field contained 9.52 million barrels (gross)
of P50 best case Oil In-Place.
Drilling of a new Lidsey-2 well has now been postponed until after the
completion of drilling of the Horse Hill-1 well.
Financial Results
During the period, the Company made a loss before taxation of GBP266,000 (6
months ended 30 June 2013: profit GBP31,000, 12 months ended 31 December 2013:
loss GBP450,000). There was a weighted loss per share of 0.01p (30 June 2013:
profit per share 0.002p, 31 December 2013: loss per share 0.02p).
Current assets including cash at 30 June 2014 amounted to GBP1,315,000 (30 June
2013: GBP592,000; 31 December 2013: GBP1,992,000).
Outlook
Your Board is confident that the investments made by the Company are both
encouraging and potentially rewarding. We will look to realise this potential
over the future years in addition to continuing to review other investment
opportunities.
The Board would like to take this opportunity to thank our shareholders, staff
and consultants for their continued support.
Donald Strang
Chairman
29 September 2014
For further additional information please contact:
Doriemus plc +44 (0) 20 7440 0640
Donald Strang/Hamish Harris
Cairn Financial Advisers LLP +44 (0) 20 7148 7900
Nominated Adviser and Broker
James Caithie/Jo Turner/
Carolyn Sansom
Square1 Consulting +44 (0) 20 7929 5599
David Bick
Mark Longson
Glossary:
up to C3 (propane) - hydrocarbon gas liquids from spectrometry showing the
presence of C1 (methane), C2 (ethane) and C3 (propane)
MD - measured depth
mineral florescence - light emitted by natural minerals showing, in some
circumstances, the presence of hydrocarbons
mud gas - gases recovered from the drilling fluids (mud)
TD - total depth
TVD ss - true vertical depth below sea level
Company Statement of Comprehensive Income
for the six months ended 30 June 2014
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Revenue 66 100 203
Cost of Sales (54) - -
Gross Profit 12 100 203
Administrative expenses (178) (71) (419)
Share based payment charge - - (236)
(Loss) / profit from operations (166) 29 (452)
Investment in subsidiary written-off (100) - -
Finance income - 2 2
(Loss) / profit before income tax (266) 31 (450)
Income tax expense - - -
(Loss) / profit attributable to the (266) 31 (450)
owners of the parent and total
comprehensive (expense) / income for
the period
(Loss) / earnings per share (Note 3)
Basic (loss) / earnings per share (0.01)p 0.002p (0.02)p
Diluted (loss) / earnings per share (0.01)p 0.002p (0.02)p
Company Statement of Changes in Equity
for the six months ended 30 June 2014
Share Share Share Based Retained Total
Capital Premium Payment Earnings Equity
Reserve
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2013 9 - 336 336
Dividends on ordinary - - - (296) (296)
shares declared and
paid
Shares issued in 38 2,360 - - 2,398
period
Share issue costs - (80) - - (80)
Share based payments - - 236 - 236
38 2,280 236 (296) 2,258
(Loss) for the year - - - (450) (450)
and total
comprehensive income
At 31 December 2013 47 2,280 236 (410) 2,153
Shares issued in 6 536 - - 542
period
Share issue costs - (30) - - (30)
6 506 - - 512
(Loss) for the year - - - (266) (276)
and total
comprehensive income
At 30 June 2014 53 2,786 236 (676) 2,399
Company Statement of Financial Position
as at 30 June 2014
As at As at As at
30 June 30 June 31 December
2014 2013 2013
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 1,016 - 1,016
Available for Sale Investment 600 - -
Total non-current assets 1,616 - 1,016
Current assets
Subsidiary held for sale - 100 100
Trade and other receivables 148 186 507
Derivative financial instruments 382 - 400
Cash and cash equivalents 785 306 985
Total current assets 1,315 592 1,992
TOTAL ASSETS 2,931 592 3,008
LIABILITIES
Current liabilities
Trade and other payables (532) (300) (855)
Total current liabilities (532) (300) (855)
TOTAL LIABILITIES (532) (300) (855)
NET ASSETS 2,399 292 2,153
Equity attributable to equity holders
of the parent
Share capital 53 30 47
Share premium reserve 2,786 191 2,280
Share based payment reserve 236 - 236
Retained earnings (676) 71 (410)
TOTAL EQUITY 2,399 292 2,153
Company Statement of Cash Flows
for the six months ended 30 June 2014
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Operating (loss) / profit (166) 31 (450)
Share based payment charge - - 236
Finance costs (net) - (2) (2)
Decrease / (increase) in trade and 359 (16) (94)
other receivables
(Decrease) / increase in trade and (673) (31) (16)
other payable
Cash generated by operating activities (480) (18) (326)
Cash flows from investing activities
Payments for intangible assets - - (390)
Payment for AFS Investment (250) - -
Loans repaid from / (granted) to - 375 375
related parties
Interest received - 2 2
Net cash used in investing activities (250) 377 (13)
Cash flows from financing activities
Proceeds from issuance of ordinary 542 212 1,629
shares
Share issue costs (30) - (40)
Income from derivative financial 18
instruments
Dividends paid to owners of the parent - (296) (296)
Net cash used in financing activities 530 (84) 1,293
Net increase in cash and cash (200) 275 954
equivalents
Cash and cash equivalents at beginning 985 31 31
of period
Cash and cash equivalents at end of 785 306 985
period
Cash and cash equivalents comprise:
Cash available on demand 785 306 985
Notes to the half-yearly results
1. Basis of preparation
As permitted IAS 34, `Interim Financial Reporting' has not been applied to
these half-yearly results. The financial information of the Company for the six
months ended 30 June 2014 have been prepared in accordance with the recognition
and measurement principles of International Financial Reporting Standards,
International Accounting Standards and Interpretations (collectively "IFRS")
issued by the International Accounting Standards Board ("IASB") as adopted by
the European Union ("adopted IFRS") and are in accordance with IFRS as issued
by the IASB. The condensed interim financial information has been prepared
using the accounting policies which will be applied in the Company's statutory
financial statements for the year ending 31 December 2014.
The financial information shown in this publication is unaudited and does not
constitute statutory accounts as defined in Section 434 of the Companies Act
2006. The comparative figures for the financial year ended 31 December 2013
have been derived from the statutory accounts for 2013. The statutory accounts
have been delivered to the Registrar of Companies. The auditors have reported
on those accounts; their report was unqualified and did not contain statements
under the section 498(2) or 498(3) of the Companies Act 2006.
2. Dividends
June June December
2014 2013 2013
GBP`000 GBP`000 GBP'000
Interim dividend paid - (296) (296)
3. (Loss) / earnings per share
The calculation of the basic and diluted (loss) / earnings per share is based
upon
June June December
2014 2013 2013
Basic (loss) / earnings per share (0.01)p 0.002p (0.02)p
(pence)
Diluted (loss) / earnings per (0.01)p 0.002p (0.02)p
share (pence)
(Loss) / profit attributable to GBP265,982 GBP31,443 GBP(450,307)
equity shareholders
Weighted average number of shares 4,911,104,970 2,016,795,578 2,791,780,820
basic
Weighted average number of shares 5,542,983,423 2,016,795,578 2,929,972,601
diluted
4. Availability of the Interim Report
Copies of the report will be available from the Company's registered office and
also from the Company's website www.doriemus.co.uk
END
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