TIDMSRSP
RNS Number : 5060A
Sirius Petroleum PLC
29 September 2015
29 September 2015
Sirius Petroleum Plc.
("Sirius" or the "Company")
Half Year Report
for the six month period ended 30 June 2015
Sirius Petroleum (AIM:SRSP), the investing Company focused on
oil and gas development and production opportunities in Nigeria,
announces its interim results for the six month period ended 30
June 2015.
Enquiries
Sirius Petroleum plc +44 (0) 20 3740 7460
Bobo Kuti / Jamie Bligh www.siriuspetroleum.com
Cairn Financial Advisers LLP (Nomad)
Tony Rawlinson/ Emma Earl +44 (0) 20 7148 7900
Merlin Partners LLP (Financial
Advisor)
Ashleigh Ruxton +44 20 7484 0901
Cantor Fitzgerald Europe (Broker)
David Porter / Sarah Wharry +44 (0) 207 894 7000
Gable Communications Limited +44 (0) 20 7193 7463
John Bick Email: srsp@gablecommunications.com
Results
I hereby present the interim results for the six month period
ended 30 June 2015. These results reflect the costs incurred during
the period to continue our evaluation work on the Ororo Field in
collaboration with our Technical Advisors, Havoc Partners and our
Nigerian partners, (Owena Oil & Gas and Guarantee Petroleum);
run our London and Nigerian operations and continue our Project
Funding discussions in relation to drilling the Ororo-2 well. The
operating loss in the half year amounted to $1,562,000 (six months
to 30 June 2014: $1,394,000, year to 31 December 2014: $4,025,000)
giving a loss per share of 0.19c (30 June 2014: 0.20c, 31 December
2014 0.54c).
Financing
During the period the Company issued a total of 208,888,143 new
ordinary shares of 0.25p each, to capitalise fees, repay loans and
settle fees and creditors totalling GBP2,559,000 at an average
issue price of 1.23p per share.
Outlook
During the first half of the year, our strategy has been to
focus on seeking to maximise the value of our existing assets and
pipeline of assets. The decision to terminate discussions with Nima
around funding the initial well on the Ororo Field entirely through
the issuance of equity was not taken lightly, but we believe will
prove to be the right decision for the Company. Seeking financing
of each project at the asset level, rather than wholly at the
public company level should be less dilutive and will allow us to
review and finance potential assets and projects on a standalone
basis using alternative sources of funding.
I am delighted by the placing and subscription of GBP1,035,000
net of costs, recently completed by the Company as announced on 22
September 2015, following the period end. This will allow the
Company to make an application for a well permit in relation to the
Ororo-2 well, which the Directors believe if awarded, would be a
considerable step forward in the development of the Ororo Field. In
addition we intend to commence initial work activities in relation
to an environmental impact assessment and apply for certain local
regulatory approvals. The Directors continue to manage carefully
the Company's expenditure to keep the operating costs of the
Company's day-to-day operations as low as possible. The recently
completed placing and subscription is encouraging and puts the
Company in a stronger financial position. Depending on the timing
of raising the Project Funding, additional general working capital
may, of course, be required.
The Directors have produced an updated cash flow model in
relation to the Ororo Field and in light of the current oil price,
the decline of rig rates, and reduction of development costs we are
still confident the project is economical in the current market
environment.
The underlying quality of our assets, the recent fundraise and
the progress made with Guarantee Petroleum and Owena Oil & Gas
in relation to moving forward with the preparatory work on the
Ororo Field, leads me to believe that Sirius is well positioned to
conclude its Project Funding.
Jack Pryde
Chairman
29 September 2015
SIRIUS PETROLEUM PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2015
Note Unaudited Unaudited Audited
Period ended Period ended Year ended
30 June 30 June 31 December
2015 2014 2014
US$'000 US$'000 US$'000
Other income 39 40 81
Share based payment
charge (442) (95) (1,516)
Other administrative
expenses (1,159) (1,339) (2,590)
Total administrative
expenses (1,601) (1,434) (4,106)
Loss from operations (1,562) (1,394) (4,025)
Finance costs (621) (658) (1,589)
-------------- -------------- -------------
Loss before taxation (2,183) (2,052) (5,614)
Taxation - - -
-------------- -------------- -------------
Loss after taxation
and loss attributable
to the equity holders
of the Company (2,183) (2,052) (5,614)
Other comprehensive
income
Exchange differences
on translating foreign
operations (50) (122) (54)
Total comprehensive
loss for the period (2,233) (2,174) (5,668)
-------------- -------------- -------------
Loss per share
Total basic and
diluted (cents per
share) 2 (0.19) (0.20) (0.54)
-------------- -------------- -------------
SIRIUS PETROLEUM PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2015
Share Share Share-based Other Exchange Retained Total
capital premium payment reserves reserve earnings equity
account reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1
January
2014 4,138 13,382 7,783 79 (198) (28,748) (3,564)
Share based
payments - - 95 - - - 95
Share issue 262 3,558 - - - - 3,820
Issue of loan fees
equity
instruments - - - 496 - - 496
Settlement of loan
fees equity
instruments - - - (216) - (369) (585)
Transactions with
owners 262 3,558 95 280 - (369) 3,826
--------- ------------- ------------ ---------- ---------------- ----------------- --------
Loss for the
period - - - - - (2,052) (2,052)
Other
comprehensive
income for the
period - - - - (122) - (122)
Balance at 30 June
2014 4,400 16,940 7,878 359 (320) (31,169) (1,912)
--------- ------------- ------------ ---------- ---------------- ----------------- --------
Share based
payments - - 1,421 - - - 1,421
Issue of share
capital 333 3,682 - - - - 4,015
Issue of loan fees
equity
instruments - - - 326 - - 326
Settlement of loan
fees equity
instruments - - - (380) - (1,019) (1,399)
Transactions with
owners 333 3,682 1,421 (54) - (1,019) 4,363
--------- ------------- ------------ ---------- ---------------- ----------------- --------
Loss for the
period - - - - - (3,562) (3,562)
Other
comprehensive
income for the
period - - - - 68 - 68
Balance at 31
December
2014 4,733 20,622 9,299 305 (252) (35,750) (1,043)
--------- ------------- ------------ ---------- ---------------- ----------------- --------
Issue of share
capital 808 3,145 (816) - - - 3,137
Share issue costs - (35) - - - - (35)
Issue of loan fees
equity
instruments - - - 191 - - 191
Settlement of loan
fees equity
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September 29, 2015 03:12 ET (07:12 GMT)
instruments - - - (496) - (923) (1,419)
Share based
payments - - 442 - - 442
------------
Transactions with
owners 808 3,110 (374) (305) - (923) 2,316
--------- ------------- ------------ ---------- ---------------- ----------------- --------
Loss for the
period - - - - - (2,183) (2,183)
Other
comprehensive
income for the
period - - - - (50) - (50)
Balance at 30 June
2015 5,541 23,732 8,925 - (302) (38,856) (960)
--------- ------------- ------------ ---------- ---------------- ----------------- --------
SIRIUS PETROLEUM PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
Assets Note U$$'000 US$'000 US$'000
Non-current
Intangible exploration
and evaluation assets 3 2,427 2,219 2,311
Property, plant
and equipment - 2 -
---------- ---------- -------------
2,427 2,221 2,311
Current
Cash and cash equivalents 14 191 19
Trade and other
receivables 4 194 29 39
Total current assets 208 220 58
Total assets 2,635 2,441 2,369
Liabilities
Current
Trade and other
payables 3,090 2,831 2,674
Loans payable 505 1,522 738
Total liabilities 3,595 4,353 3,412
Equity
Issued share capital 5 5,541 4,400 4,733
Share premium 23,732 16,940 20,622
Share based payment
reserve 8,925 7,878 9,299
Other reserves - 359 305
Exchange reserve (302) (320) (252)
Retained earnings (38,856) (31,169) (35,750)
---------- ---------- -------------
Equity attributable
to owners of the
company (960) (1,912) (1,043)
Total equity and
liabilities 2,635 2,441 2,369
SIRIUS PETROLEUM PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2015
Unaudited Unaudited Audited
Period Period Year ended
ended ended
30 June 30 June 31 December
2015 2014 (restated) 2014
US$'000 US$'000 US$'000
Operating activities
Loss after tax (2,183) (2,052) (5,614)
Depreciation - 2 8
Finance cost 336 658 1,589
(Increase)/decrease in trade
and other receivables (141) 254 247
Equity settled share-based
payments 442 95 1,516
Expenses settled in shares 137 - -
Increase in trade and other
payables 859 156 261
Net cash inflow/(outflow) from
operating activities (550) (887) (1,993)
---------- ----------------- ------------
Investing activities
Purchase of property, plant
and equipment - (3) (7)
Investment in intangibles (135) (238) (330)
Net cash (outflow)/inflow from
investing activities (135) (241) (337)
---------- ----------------- ------------
Financing activities
Proceeds from issue of share
capital - - -
Share issue costs (35) - -
Finance cost (10) (13) (13)
Loans received 760 1,319 2,426
Net cash inflow from financing
activities 715 1,306 2,413
---------- ----------------- ------------
Net change in cash and cash
equivalents 30 178 83
Cash and cash equivalents at
beginning of period 19 27 27
Exchange difference on cash
and cash equivalents (35) (14) (91)
Cash and cash equivalents at
end of period 14 191 19
---------- ----------------- ------------
The cash flow for the period to 30 June 2014 has been restated
to reallocate the amount shown as expenses settled in shares
correctly, resulting in a movement of $1,487,000 between expenses
settled in shares and increase in trade and other payables.
SIRIUS PETROLEUM PLC
NOTES TO THE INTERIM REPORT
FOR THE PERIOD ENDED 30 JUNE 2015
1. BASIS OF PREPARATION
The unaudited interim financial statements have been prepared in
accordance with applicable accounting standards and under the
historical cost convention. The financial information set out in
this interim report does not constitute statutory accounts as
defined in section 434 of the Companies Act 2006. The Group's
statutory financial statements for the year ended 31 December 2014
have been delivered to the Registrar of Companies. The auditor's
report on those financial statements was unmodified.
Going concern
The directors have prepared cash flow projections through to 30
September 2016. These projections only take account of the on-going
management costs of the Group, and the clearance of all payables
outstanding at the date of this report (other than an aggregate
amount of $2.6 million which relates to amounts owed to directors,
ex-directors and amounts accrued in relation to payments which are
to be paid if and when production of oil commences). The payment of
accrued directors' remuneration and certain of the directors'
remuneration payable in respect of the current year has been
excluded from these projections as the directors have agreed to
defer payment until such time as funds are available. The
projections also do not assume any oil extraction or income from
oil trading nor do they assume any acquisitions take place or that
any additional assessment of the prospective resources is
undertaken over and above that authorised as at the date of this
report.
On 5 May 2015 the Company signed a convertible loan facility
with Calvet International Limited which provided up to GBP1.5
million ($2.4 million) of funding for general working capital, of
which only GBP200,000 has been drawn down to date. This facility
has subsequently been reduced and GBP700,000 remains available to
draw down subject to approval by Calvet. The Board is confident
that it will be able to draw down these funds, and on the basis
that the remaining GBP700,000 of this facility is drawn in full,
together with the recent fundraising, the cash flow projections
indicate that the Group has sufficient headroom to meet its working
capital requirements.
On the basis of the assumptions above and following a detailed
review by the directors of the Group's cash flow forecast, the
directors believe that the Group has sufficient cash resources to
meet its liabilities as they fall due for a period of at least 12
months from the date that the financial statements are signed.
Consequently, the financial statements have been prepared on a
going concern basis.
Segmental reporting
An operating segment is a distinguishable component of the Group
that engages in business activities from which it may earn revenues
and incur expenses, whose operating results are regularly reviewed
by the Group's Chief Executive Officer to make decisions about the
allocation of resources and assessment of performance and about
which discrete financial information is available.
The Chief Executive Officer reviews financial information for
and makes decisions about the Group's performance as a whole, as
the Group has not generated revenue during the period.
Subject to further acquisitions and the future development of
the business in Nigeria the Group expects to further review its
segmental information during the forthcoming financial year.
Fees and Loans Settled in Shares
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Where shares have been issued as consideration for services
provided or loans outstanding they are measured at fair value. The
difference between the carrying amount of the financial liability
(or part thereof) extinguished, and the fair value of the shares,
is recognised in profit or loss.
2. LOSS per share
The calculation of the basic loss per share is based on the loss
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period. The impact of
the options and warrants on the loss per share is
anti-dilutive.
Unaudited Unaudited Audited
six months six months year ended
ended ended
30 June 30 June 31 December
2015 2014 2014
Loss on ordinary activities
after tax ($'000) (2,183) (2,052) (5,614)
----------------- ----------------- -----------------
Weighted average number
of shares for calculating
basic loss per share 1,162,343,230 1,003,217,423 1,043,577,439
----------------- ----------------- -----------------
Basic and diluted loss
per share (US cents) (0.19) (0.20) (0.54)
----------------- ----------------- -----------------
3. INTANGIBLE EXPLORATION AND EVALUATION ASSETS
Cost of oil and gas exploration - pending determination
$'000
Cost
At 1 January 2014 1,981
Additions 238
At 30 June 2014 2,219
Additions 92
At 31 December 2014 2,311
Additions 135
Exchange difference (19)
At 30 June 2015 2,427
---------------------------
Amortisation and impairment
At 1 January 2014, 30 June 2014, 31 December 2014
and 30 June 2015 -
---------------------------
Net book value at 30 June 2015 2,427
---------------------------
Net book value at 31 December 2014 2,311
---------------------------
Net book value at 30 June 2014 2,219
---------------------------
During the year ended 31 December 2011 Sirius Ororo OML95
Limited entered into an agreement with Guarantee Petroleum Company
Limited and Owena Oil and Gas Limited which gives it the right to
acquire a 40% interest in the Ororo Oil Field.
The consideration for the 40% interest in the field was
$1,000,000 paid on the date of the agreement with a further
$500,000 due on the commencement of the operation of the well. At
the time of signing the agreement, the directors considered the
fair value of the liability in respect of the additional $500,000
payable. Based on an assessment of how likely it would be that this
would be paid discounted at 15%, the directors considered the
amount to be immaterial and therefore did not recognise a liability
at that time.
At 31 December 2012 the directors reassessed their estimate of
the future cash flows in accordance with the Group's accounting
policies. Following the additional work as noted below and the
completion of the feasibility report along with the ongoing funding
negotiations, the directors were confident of commencement of the
operation of the well. As a result this liability was then expected
to become payable. The directors have reviewed the assumptions made
and do not consider them to have changed. Therefore the carrying
value of the liability has been assessed at the same value at 30
June 2015 at $318,000 (30 June 2014 and 31 December 2014:
$318,000).
A provisional approval for the Environmental Impact Assessment
("EIA") was granted to the Project in 2012. This needs to be
updated and signed off by the Ministry of Environment in order to
proceed with drilling. The Group has also commenced planning
appropriate community projects to finalise the subsequent drilling
programme and will also cover certain operational costs related to
the field. The Group will cover all costs of this phase of the
project, subject to funding. Costs plus interest of LIBOR+3% will
be recoverable on the production of oil before the profit interest
split is applied; these costs are being added to the costs of the
asset.
The directors have reviewed the investment for impairment.
During the year to 31 December 2013 a Volumetric Estimation report
was received. The Directors have produced an updated cash flow
model in light of the current oil price, the decline of rig rates,
and reduction of development costs, and are still confident the
project is economical in the current market environment based on
the volumetrics from the 2013 Schlumberger Report.
The Group intends investing further amounts into the Ororo Oil
Field, as part of its strategic development plans. The costs of the
capital and operating costs will be covered by separate funding
facilities expected to be a mixture of debt and equity.
4.trade and other receivables
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
US$'000 US$'000 US$'000
Other receivables 177 11 18
Prepayments and accrued
income 17 18 21
Total 194 29 39
---------- ---------- ------------
Other receivables at 30 June 2015 include a loan of $159,000
which was repaid in shares at the end of June 2015, although the
cash was not received until July 2015.
Trade and other receivables are usually due within 30 - 60 days
and do not bear any effective interest rate. The fair value of
these short term financial assets is not individually determined as
the carrying amount is a reasonable approximation of fair
value.
5. trade and other PAYABLES
Unaudited Unaudited Audited
30 June 2015 30 June 2014 31 December
2014
US$'000 US$'000 US$'000
Trade payables 539 776 409
Other payables 367 397 346
Accruals 2,184 1,658 1,919
Total 3,090 2,831 2,674
----------------------- ----------------------- -----------------------
The fair value of trade and other payables has not been
disclosed as, due to their short duration, management considers the
carrying amounts recognised in the balance sheet to be a reasonable
approximation of their fair value.
Since 30 June 2015, as announced on 22 September 2015, in
accordance with certain terms of the Financial & Technical
Services Agreement ("FTSA"), the Company has approved costs
incurred by Sirius' partners to allow the Company to apply to the
DPR for a Well Permit which will result in a payment of $997,500 to
Sirius' partners. This amount is expected to be paid in October
2015 using the use of proceeds from the Placing and Subscription.
This amount is not included in the Trade and other Payable balance
above as it was not payable as at 30 June 2015.
6. SHARE CAPITAL
The movement in ordinary shares and share premium in the period
was as follows:
Nominal amount Share premium
Number (USD $'000) (USD $'000)
As at 31 December 2013 956,499,985 4,138 13,382
Shares issued for fees
due 35,634,469 147 1,970
Loan repayments 27,596,212 115 1,588
At 30 June 2014 1,019,730,666 4,400 16,940
-------------- --------------- --------------
Shares issued for fees
due 39,142,857 165 1,788
Loan repayments 39,863,690 168 1894
At 31 December 2014 1,098,737,213 4,733 20,622
-------------- --------------- --------------
Shares issued for fees
due 162,704,348 630 2,205
Loan repayments 46,183,795 178 940
Share issue costs - - (35)
At 30 June 2015 1,307,625,356 5,541 23,732
-------------- --------------- --------------
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