TIDMNUOG
RNS Number : 6125L
Nu-Oil and Gas PLC
28 December 2018
28 December 2018
Nu-Oil and Gas plc
("Nu-Oil" or "the Company")
Preliminary Results for the year ended 30 June 2018
Nu-Oil, the independent Oil and Gas Company, today announces its
results for the year ended 30 June 2018.
HIGHLIGHTS
Building a portfolio of Stranded Fields
-- The Company anticipates the continued focus on the
identification and development of stranded and marginal fields
through the investment in, and relationship with, Marginal Field
Development Company (MFDevCo) Ltd. ('MFDevCo') in which Nu-Oil and
Gas plc. ('Nu-Oil' or the 'Company') holds a 50% interest.
-- This marginal field strategy will seek to utilise innovative
engineering solutions that reduce both Capex and Opex and are
redeployable to build a portfolio of low risk, highly appraised
marginal assets.
-- The Company continues to actively seek new assets in conjunction with MFDevCo.
Western Newfoundland
-- The Company entered into a Production Sharing Agreement (the
'PSA') with PVF Energy Services Inc. ('PVF') for PL2002-01(A) on 31
January 2017. The PSA provides for the Company to receive 50% of
net revenue from production following the recovery of any costs
incurred by PVF in performing its obligations.
-- PVF has faced some challenges in developing operations on
PL2002-01(A) which has resulted in unexpected delays hampering, but
not halting progress.
-- The Company, with PVF and others are also in discussion
regarding wider regional rejuvenation plans which would provide a
step change in the portfolio interest as it currently stands.
Financial
-- Loss before tax for the year was GBP1,878,000 (2017:
GBP1,671,000). The main area of expense has been the continuing
development of the foundations for the marginal field initiative.
Management continued to maintain its cost discipline in western
Newfoundland, this cost discipline was in part off-set by the
continued expenditure with respect to the implementation of the
marginal field strategy. The loss included depreciation,
amortisation and provision charges of GBP341,000 in the period
relating to tangible and intangible assets consistent with its
accounting policies
-- The Group has a net liability position of GBP1,053,000 (2017:
GBP1,880,000). The net liabilities are mainly due to the loan owed
to Shard Capital Management ('Shard') and to related party
creditors. At this time neither Shard nor related parties have
sought to recover these debts.
-- The Group had cash balances of GBP861,000 at 30 June 2018 (2017: GBP654,000).
-- The status of commercial discussions, the Company's ability
to raise capital and the Company's cash position provide management
with the confidence that the business model has the potential to
allow the Group to satisfy its liabilities and operate as a going
concern.
-- During the year the Company raised GBP2,706,000 net through
the issue of new ordinary shares.
OUTLOOK
-- Clear focused strategy for commercialising stranded and marginal fields.
-- Recent enquiries provide directors and management with
confidence regarding the viability of the business model and
provide confidence that the Company can add further projects to its
portfolio.
Nigel Burton, CEO of Nu-Oil, commented:
"The Company has made progress on several projects this year and
we are excited about the opportunities that lie ahead. Activity has
increased in MFDevCo and we look forward to updating the market as
it acquires projects and concludes investigations into alternative
marginal field commercialisation methods.
I'd like to thank all stakeholders, in particular shareholders,
for their support and we look forward to providing updates in
2019."
Annual General Meeting
The Company also announces that its Annual General Meeting of
shareholders ("AGM") will be held at the Castlefield Hotel,
Liverpool Road, Manchester, M3 4JR on Friday 25 January 2019 at
11:30 a.m.
Financial Statements
Included with this announcement is a summary of the Company's
Annual Accounts for the year ended 30(th) June 2018 as extracted
from the Annual Report, being:
-- Strategic Report
-- Consolidated Income Statement
-- Consolidated Statement of Comprehensive Income
-- Consolidated Statement of Financial Position
-- Consolidated Statement of Changes in Equity
-- Consolidated Statement of Cashflows
-- Notes to the Financial Statements
The full Annual Report and Financial Statements for the year
ended 30 June 2018 and the notice of AGM are available to download
from the Company's website at www.nu-oilandgas.com. Those
shareholders who have elected to receive paper copies of all
communications will receive a copy of both documents in addition to
the AGM Letters and proxy forms, which have been sent to all
shareholders today. Shareholders can change their chosen method of
communication in Shareview at the following address:
https://portfolio.shareview.co.uk/7/Portfolio/Default/en/Anonymous/Pages/Login.aspx.
Enquiries
Nu-Oil and Gas plc
Simon Bygrave Tel: +44 (0)161 817 7460
Investor Relations & Communications
Nigel Burton Tel: +44 (0)7785 234447
Chief Executive Officer
Strand Hanson Limited Tel: +44 (0)20 7409 3494
Rory Murphy/Ritchie Balmer/Jack
Botros
Novum Securities Limited Tel: +44 (0) 20 7399 9425
Jon Bellis
Disclaimer
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
STRATEGIC REPORT
Chairman's Statement and Operational Review
As Chairman I reconfirm that our objective remains to build our
company, primarily through its interest in Marginal Field
Development Company ('MFDevCo') Ltd. ('MFDevCo'), into a leader in
the development and production of marginal or stranded oil and gas
fields with a portfolio of offshore and onshore assets. In this
statement I will outline the progress we have made towards that
objective this year. Our priority remains to secure projects and
access production as quickly as possible.
The Company continues to focus on its strategy to target
undervalued opportunities within the oil and gas sector which are
generally referred to as marginal or stranded assets. There is a
huge population which varies according to changes in the external
environment such as oil price, field size, economic strategies and
many other factors. It's a dynamic population increasing and
decreasing according to changes in external factors and hence
complex but if successfully acquired, such opportunities can be
very profitable for far lower investment than if commenced at the
exploration stage. This is why we believe our strategy is
attractive from an economic point of view, but also why it is
complex to implement.
We continue to negotiate a number of specific opportunities at
different stages of the 'commercialisation cycle'; we have
submitted proposals which are being considered and we are hopeful
that we will be able to update shareholders with positive
developments in due course. Our marginal field proposals span a
range from larger scale opportunities to more standard repeatable
and smaller projects, resources are being applied proportionally as
required. We are building a team to speed delivery and as always,
our objective remains the identification and acquisition of
projects in the 'marginal, stranded' domain with the most
appropriate revenue stream and efficient use of capital to maximise
returns.
These opportunities are the result of the Company's continual
innovation, whether it be configuring technology, embracing novel
ways to recover resources or adopting ideas from other industries,
which enable us to identify and generate additional value.
Similarly, as we strive to maximise the value from our current
assets, we seek new opportunities to create value in both domains,
offshore and onshore. With this mindset the Board has identified
new opportunities which fit our strategy to target low-risk,
undervalued assets, in addition to the acquisition of projects by
MFDevCo and the development of our assets in Canada, via Enegi Oil
Inc. ('Enegi'). MFDevCo is focused on offshore projects,
particularly where there is established production or resources
that can generate near-term revenue; Nu-Oil will also seek suitable
onshore projects. We will prioritise appraisal opportunities but
will also consider exploration opportunities where the value of new
investment is demonstrable. By 'demonstrable', we mean where it can
be shown that the risk / return trade off is significantly better
than industry norms.
Marginal Field Development Company Ltd. ("MFDevCo")
MFDevCo has made tangible progress in a number of ways this
year. Firstly, negotiations have continued on a number of larger
scale and undervalued opportunities with effort directed to
complete the key tasks required to meet MFDevCo's objectives and
those of the counterparty. The technical evaluation including
operating plans has been satisfactorily concluded, with the
assistance of consortium members, and are being integrated with
financing requirements. The larger the size and value of the
project, the longer it takes to conclude the negotiations and
noting the 'arbitrage' element that characterises the opportunities
we target, shareholders will, I am sure, understand the
complexities involved to conclude a deal. Significant project
finance will be required to unlock these opportunities but there
are innovative means, analagous to shipping finance, in which this
can be done.
The second strand of activity during the past year has focused
on the smaller projects which can be acquired and developed more
quickly to deliver significant growth. MFDevCo has continued to
evaluate ways that Helvick and Dunmore, in both of which MFDevCo
has a 10% interest with the option to increase to 50%, might be
economically developed. Noting that they typify what the U.K.'s Oil
and Gas Authority ('OGA') and others refer to as 'small pools',
while great fanfare surrounded the industry's initiative to unlock
these fields, it is unsurprising that little appears to have been
achieved given the cost and market volatility associated with
traditional developments approaches. MFDevCo believes it has
identified a development mode that could make Helvick and Dunmore
economic to develop and has informed its licence partners
accordingly. We believe that this work will create 'standard,
repeatable' projects I referred to earlier which, logically, should
be quicker to deliver.
The third strand of activity is consistent with my theme of
continual innovation. There are a number of aspects to this
including more innovative approaches to project delivery,
financing, use of proven technology and how these impact upon the
opportunities that can be garnered. We have identified an
alternative way to commercialise a subset of late-life marginal
fields and significant progress has been made to create a larger
population of viable targets which will have a strong impact upon
potential growth. Once we are comfortable with its viability
shareholders will be informed.
This brings me neatly to the fourth strand of activity currently
being undertaken which is the restructuring of the management and
team to implement the above plans more effectively than we have
been able to do to date. During the year we have recruited a number
of people with the experience to manage the interface with the
consortium more effectively and as a result to speed up the
evaluation and assessment process of identified opportunities. Due
diligence is an imperative in choice of opportunity and this
additional resource is a significant benefit. Three positions have
been filled, that of Developments Manager, Projects Manager and CEO
of MFDevCo (Brazil) Limited, a recently formed subsidiary of
MFDevCo.
Western Newfoundland
The Company remains committed to developing the assets in
western Newfoundland which it holds via its 100% owned Canadian
operating subsidiary, Enegi. Operating in western Newfoundland has
always presented unique challenges but even noting the difficulties
associated with the region, we have a high degree of confidence in
the potential of these assets and the possibility to use them as
catalyst for a wider regional development.
The Board has been reassessing the approach to generate
production from PL2002-01(A) (also known as Garden Hill) more
effectively than has resulted from the activities being undertaken
by PVF Energy Services Inc. ('PVF'). We are committed to optimising
the value of Garden Hill, which in-house subsurface models built up
over the years, and acknowledged as the most comprehensive
available models of the area, indicate holds up to 97mmboe. We
entered into the Production Sharing Agreement ('PSA') with PVF
believing this would achieve our objective and PVF has expended
around C$1 million on the work programme to date. However,
shareholders will be aware that a variety of technical issues have
delayed the production test on the PAP#1-ST#3 well. Technical and
commercial discussions with PVF are ongoing to determine the most
effective route to achieving production. These discussions are
expected to conclude imminently at which point we will update the
market with our plan for the next stage of development.
Furthermore, meetings have taken place with the Department of
Natural Resources ("DNR") in order to judge the viability of the
regional play we are considering and this information will be
important input as to when we and on what terms we choose to
conclude a farm-in.
EL1070
The Company also holds, via Enegi, 100% interest in the deep
rights in Exploration Licence 1070 ('EL1070'), which is located
almost adjacent to Garden Hill. While exploration is not our
priority, we believe this licence has significant potential.
Meetings have been held with the Canada-Newfoundland Offshore
Petroleum Board ('C-NLOPB') to determine how the licence can be
advanced while the moratorium on hydraulic fracturing is in place
and which affects the shallow rights, held by Shoal Point Energy
('SPE'). Further discussions took place with G2 Energy Corp. ("G2")
who wish to extend the current agreement, although our own
discussions with the regulator will provide better direction and
G2's option was allowed to lapse. As a result, we intend to take
direct contact with SPE to agree the way forward and we will update
the market accordingly.
Outlook
As I am, shareholders will be frustrated by delays in concluding
project negotiations. Unfortunately, this is a characteristic of
the oil sector as a result of the scale of projects, regulatory and
legal hurdles, complexity of operations, construction and general
engineering. However, I am confident that we will be able to
announce the first acquisition of a marginal field, along with its
development plan, in 2019. As we work to close negotiations for
larger marginal field projects, I expect the Company to expand its
portfolio by acquiring the smaller, late-life projects I have
outlined.
The demand for solutions capable of unlocking marginal fields
continues to grow worldwide. Support from governments is driven by
the need for energy security, the falling away without replacement
of so many projects and the concern that energy resources must be
utilised.
I emphasise again, that negotiations to secure marginal field
projects of various types are ongoing and, with much of the due
diligence completed, potential sources of finance and build
facility identified, and the Consortium ready to go, MFDevCo is
well placed to start project development once agreement is
reached.
I expect activities in Newfoundland to deliver results within
the year ahead. While the marginal fields we are advancing will
MFDevCo will be the future of the Company, I look forward to
finally seeing past efforts deliver value from these legacy
assets.
Finally, I would like to thank both management and shareholders
for their continued support and look forward to realising the
rewards from the opportunities that have been created over the last
few years.
Alan Minty
Chairman
Financial Review
Revenue
No revenue was generated during the year. Management awaits the
results of activity on its lease, PL2002-01(A), to assess the
likelihood of it becoming revenue generating in future years. The
Company entered into a Production Sharing Agreement (the 'PSA')
with PVF Energy Services Inc. ('PVF') for PL2002- January 2017. The
PSA provides for the Company to receive 50% of net revenue from
production following the recovery of any costs incurred by PVF in
performing its obligations.
Loss before tax
Loss before tax for the year was GBP1,878,000 (2017:
GBP1,671,000 loss). The main area of expense has been the
continuing development of the marginal field initiative. Management
continued to cut costs in western Newfoundland but maintained its
expenditure with respect to the implementation of the marginal
field strategy. The loss included depreciation, amortisaton and
provision charges of GBP341,000 (2017: GBP367,000) in the period
relating to tangible and intangible assets. Operating loss in
effect was GBP1,537,000.
Statement of Financial Position
Net liabilities at 30 June 2018 were GBP1,053,000 (2017: net
liabilities of GBP1,880,000). The decrease in net liabilities
reflects fundraising activities that were undertaken in the period.
During the year the Company raised GBP2,706,000 through the issue
of new ordinary shares. The majority of the Group's liabilities are
due to related parties and to Shard Capital Management. It is the
Group's view that these creditors are supportive of the Group.
At 30 June 2018, the Group had cash balances of GBP861,000
compared to GBP654,000 at 30 June 2017. The Group had trade and
other payables of GBP3,381,000 at 30 June 2018 (2017:
GBP3,781,000). These cash balances when considered with the
additional information provided in Note 1 to the financial
statements allow the Directors to conclude that the Group and
Company should be treated as a going concern.
Cash flows
Cash inflows for the year were GBP207,000 compared to a cash
inflow of GBP654,000 in 2017. The Group's cash position was
carefully managed during the year while it sought to implement its
marginal field strategy.
Future funding and capital requirements
The Directors believe the Group has developed a very attractive
business model in choosing to focus on the development of stranded
and marginal fields. The Directors believe that the Group has the
necessary foundations in place with the potential to see an upturn
in activity in 2019. Management believes the Company has sufficient
resources to allow significant, tangible progress to be achieved
from its current resources in the short term but longer term and as
a result of the size of projects that the Company is targeting,
further funding, much of it project finance, will be required to
realise project returns.
CONSOLIDATED INCOME STATEMENT
For the year ended 30 June 2018
2018 2017
GBP'000 GBP'000
---------------------------------------- --------- ---------
Revenue - -
Cost of sales - -
---------------------------------------- --------- ---------
Gross Result - -
---------------------------------------- --------- ---------
Administrative expenses (1,672) (1,457)
---------------------------------------- --------- ---------
Loss from operations (1,672) (1,457)
---------------------------------------- --------- ---------
Finance costs (206) (214)
---------------------------------------- --------- ---------
Loss before tax (1,878) (1,671)
---------------------------------------- --------- ---------
Taxation - -
---------------------------------------- --------- ---------
Loss for the year (1,878) (1,671)
---------------------------------------- --------- ---------
Loss per share (expressed in pence per
share)
Basic (0.1p) (0.2p)
Diluted (0.1p) (0.2p)
---------------------------------------- --------- ---------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2018
2018 2017
GBP'000 GBP'000
---------------------------------------- --------- ---------
Loss for the year (1,878) (1,671)
Other comprehensive (expense)/income:
Currency translation differences (1) 1
Other comprehensive (expensive)/income
for the year, net of tax (1) 1
----------------------------------------- --------- ---------
Total comprehensive expense for
the year (1,879) (1,670)
----------------------------------------- --------- ---------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2018
2018 2017
GBP'000 GBP'000
----------------------------- --------- ---------
Non-current assets
Tangible fixed assets 195 242
Intangible assets 813 1,123
Other long-term assets 477 493
----------------------------- --------- ---------
1,485 1,858
----------------------------- --------- ---------
Current assets
Trade and other receivables 993 922
Cash and cash equivalents 861 654
1,854 1,576
----------------------------- --------- ---------
Total assets 3,339 3,434
Current liabilities
Trade and other payables (3,381) (3,781)
Due to related parties (541) (1,044)
----------------------------- --------- ---------
(3,922) (4,825)
----------------------------- --------- ---------
Non-current liabilities
Provisions (470) (489)
----------------------------- --------- ---------
Total liabilities (4,392) (5,314)
----------------------------- --------- ---------
Net liabilities (1,053) (1,880)
Equity
Ordinary share capital 3,072 2,757
Share premium account 31,062 28,671
Reverse acquisition reserve 9,364 9,364
Other reserves (2,487) (2,487)
Warrant reserve 409 409
Accumulated losses (42,473) (40,594)
----------------------------- --------- ---------
Total equity (1,053) (1,880)
----------------------------- --------- ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2018
Ordinary Share Reverse
share premium acquisition Other Warrant Accumulated Total
capital account reserve reserves reserve Losses equity
GBP'000 GBP'000 GBP'000 GBP'000(1) GBP'000(3) GBP'000 GBP'000
(2)
----------------------- --------- --------- ------------- ------------- ------------- -------------- ----------
Balance at 1 July
2016 2,022 26,431 9,364 (2,487) 355 (38,924) (3,239)
Comprehensive
(expense)/income
Loss for the year - - - - - (1,671) (1,671)
Other comprehensive
income
Currency translation
differences - - - - - 1 1
Total other
comprehensive
income - - - - - 1 1
----------------------- --------- --------- ------------- ------------- ------------- -------------- ----------
Total comprehensive
expense - - - - - (1,670) (1,670)
Transactions with
owners
Effects of
fundraisings 735 2,294 - - - - 3,029
Effects of warrants - (54) - - 54 - -
----------------------- --------- --------- ------------- ------------- ------------- -------------- ----------
Total of transactions
with owners 735 2,240 - - 54 - 3,029
Balance at 30 June
2017 2,757 28,671 9,364 (2,487) 409 (40,594) (1,880)
Comprehensive expense:
Loss for the year - - - - - (1,878) (1,878)
Other comprehensive
expense:
Currency translation
differences - - - - - (1) (1)
Total other
comprehensive
expense - - - - - (1) (1)
Total comprehensive
expense - - - - - (1,879) (1,879)
Transactions with
owners
Effects of
fundraisings 315 2,391 - - - - 2,706
Effects of warrants - - - - - - -
Total of transactions
with owners 315 2,391 - - - - 2,706
Balance at the 30
June 2018 3,072 31,062 9,364 (2,487) 409 (42,473) (1,053)
----------------------- --------- --------- ------------- ------------- ------------- -------------- ----------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2018
2018 2017
GBP'000 GBP'000
------------------------------------------- --------- ---------
Cash flows from operating activities
Cash used in operations (2,156) (2,375)
Net cash used in operating activities (2,156) (2,375)
-------------------------------------------- --------- ---------
Cash flows from financing activities
Share capital issued for cash 2,706 3,029
Repayments of loan (343) -
Net cash generated from financing
activities 2,363 3,029
-------------------------------------------- --------- ---------
Net increase in cash and cash equivalents 207 654
Cash and cash equivalents at the 654 -
start of the year
Cash and cash equivalents at the
end of the year 861 654
-------------------------------------------- --------- ---------
NOTES TO THE FINANCIAL STATEMENTS
CORPORATE INFORMATION
The consolidated and Company financial statements of Nu-Oil and
Gas plc ("NUOG" or the "Company" and its subsidiaries, together the
"Group") for the year ended 30 June 2018 were authorised for issue
in accordance with a resolution of the Board of Directors on 27
December 2018.
Nu-Oil and Gas plc was incorporated in the United Kingdom on 13
September 2007 and has registered address of 5th Floor, Castlefield
House, Liverpool Road, Manchester, M3 4SB. Enegi Oil Inc., which is
the principal operating subsidiary of the Group, was incorporated
in the Province of Newfoundland and Labrador in Canada on 5 May
2006 and has registered address of 36, Quidi Vidi Road, St.John's,
NL A1A 1C1, Canada. The Group is domiciled in the UK for tax
purposes and its shares are listed on the Alternative Investments
Market ("AIM") of the London Stock Exchange.
The principal activity of the Company and Group is the
identification, development and operation of hydrocarbon
opportunities with its focus being on the acquisition of
stranded/marginal fields the location of which could be in any
jurisdiction.
1. BASIS OF PREPARATION
The consolidated financial statements of the Group and the
financial statements of the parent Company have been prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union (IFRSs as adopted by the EU), the
Companies Act 2006 that applies to companies reporting under IFRS,
and IFRS-IC interpretations. The consolidated financial statements
have been prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of
applying the group's accounting policies. The areas involving a
higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to the consolidated financial
statements are disclosed in note 2.
a) New and amended standards adopted by the group
There are no new or amended standards adopted by the group in
the year.
b) New standards, amendments and interpretations not yet
adopted
The following new standards, which have been issued but are not
yet effective, have not been early adopted by the Group or Parent
Company:
-- IFRS 9 'Financial instruments (effective for annual periods
beginning on or after 1 January 2018);
-- IFRS 15 'Revenue from contracts with customers' (effective
for annual periods beginning on or after 1 January 2018);
-- Amendment to IFRS 15, 'Revenue from contracts with customers'
(effective for annual periods beginning on or after 1 January
2018);
-- IFRS 16 'Leases' (effective for annual periods beginning on or after 1 January 2019).
These changes are not expected to have a material impact on the
Group.
There are no other IFRSs or IFRIC interpretations that are not
yet effective that would be expected to have a material impact on
the Group.
Going concern
The Directors continue to adopt the going concern basis in
preparing the Consolidated and Parent company Financial Statements
as they have a reasonable expectation that the Group and Company
has sufficient resources for the short term and, will be able to
obtain adequate funding to continue operating for the foreseeable
future. In forming this judgement the Directors reviewed the
Group's funding, budget and business plan for the twelve months
from signing the financial statements. The Directors have relied
upon the critical assumption that the Group will be able to achieve
the key milestones of the business plan associated with its
strategy to acquire and develop stranded and marginal fields which
they believe will result in the availability of adequate additional
funding.
The assumptions described above reflect the Company's
circumstances at the date that the financial statements were
approved by the Board and to the extent that any of the assumptions
are shown to not be valid the Directors believe that there are a
number of actions that they may take to ensure that the Company
remains a going concern. To the extent that the above assumptions
are not valid, there exists a material uncertainty that may cast
significant doubt upon the Group's and the Company's ability to
continue as a going concern. The financial statements do not
include the adjustments that would result if the Group or Parent
Company were not considered to be a going concern.
Basis of consolidation
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair value of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The Group recognises any non-controlling interest
in the acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognised amounts of acquiree's identifiable net
assets.
Subsidiaries are all entities (including structured entities)
over which the group has control. The group controls an entity when
the group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those
returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which
control is transferred to the group. They are de-consolidated from
the date that control ceases.
Inter-company transactions, balances, income and expenses on
transactions between group companies are eliminated. Profits and
losses resulting from inter-company transactions that are
recognised in assets are also eliminated. Accounting policies of
subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the group.
Associates are all entities over which the group has significant
influence but not control, generally accompanying a shareholding of
between 20% and 50% of the voting rights. Investments in associates
are accounted for using the equity method of accounting. Under the
equity method, the investment is initially recognised at cost, and
the carrying value is increased or decreased to recognise the
investor's share of the change in net assets of the investee after
the date of acquisition.
The group's share of post-acquisition profit or loss is
recognised in the income statement, and its share of
post-acquisition movements in other comprehensive income is
recognised in other comprehensive income with a corresponding
adjustment to the carrying amount of the investment. When the
group's share of losses in an associate equals or exceeds its
interest in the associate, including any other unsecured
receivables, the group does not recognise further losses, unless it
has incurred legal or constructive obligations or made payments on
behalf of the associate. Distributions received from an associate
reduce the carrying amount of the investment.
The Group has a 50% interest in the Marginal Field Development
(MFDevCo) Ltd. The directors deem that the Group has significant
influence but not control over this entity. In accordance with IAS
28 this investment is accounted for using the equity method of
accounting. At the year end the investment balance is held at
GBPnil after deduction of the Group's share of post-acquisition
losses recognised.
2. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies have been applied consistently
throughout the year.
Revenue recognition
Production revenues are recognised upon transfer of title to the
customer upon collection or delivery of oil. Revenue comprises the
fair value of the consideration received or receivable for the sale
of oil production net of sales taxes.
Segment Reporting
IFRS 8 Operating Segments requires that the segments should be
reported on the same basis as the internal reporting information
that is provided to the chief operating decision-maker. The group
adopts this policy and the chief operating decision-maker has been
identified as the Board of Directors of the Company.
Tangible and intangible oil and gas assets
Tangible oil and gas assets relate to assets for a specific
prospect where proven reserves are known to exist. Such assets
include the development expenditure in bringing a specific prospect
into production.
Intangible oil and gas assets relate to assets for a specific
prospect without proven reserves. Such assets include exploration
costs at a specific site to locate proven reserves. At the point
where proven reserves are discovered intangible assets are
transferred to tangible assets.
Intangible assets also include expenditure on the development of
engineering solutions adopted in the Marginal Field Initiative such
that the key engineering principles of those solutions could be
easily replicated for application to other projects.
Oil and gas properties
Properties comprise payments made to obtain or extend the
working interest in a specific prospect. Property acquisition costs
are capitalised within oil and gas properties and depreciated on a
straight-line basis at the point production commences. Property
assets are reviewed on an annual basis to confirm that drilling
activity is planned and it is not impaired. If no future activity
is planned, the remaining balance of the licence and property
acquisition costs is written off. Upon determination of
economically recoverable reserves ("proved reserves" or "commercial
reserves"), the costs are depreciated over the useful economic life
of the related prospect based on known production levels and
estimated commercial reserves.
Intangible capitalised exploration costs
Geological and geophysical exploration costs are charged against
income as incurred. Costs directly associated with an exploration
well are capitalised as an intangible asset until the drilling of
the well is complete and the results have been evaluated. If
hydrocarbons are not found, but it is deemed possible that further
expenditure on the drilled well will lead to a hydrocarbon
discovery, the costs associated with the well continue to be
capitalised as an intangible asset.
Until the commencement of further expenditure on the drilled
well the capitalised exploration costs will be deemed to have a
useful economic life of 5 years and will be amortised accordingly.
If the planned further activity on the well is deemed to have been
terminated, then the full value of the associated intangible asset
is written off but reinstated should the activity on the well
recommence at a future date.
If hydrocarbons are not found, and are not expected to be
discovered, the total exploration expenditure is written off. If
hydrocarbons are found and are likely to be capable of commercial
development, the costs continue to be carried as an asset. All such
carried costs are subject to technical, commercial and management
review at least once a year to confirm the continued intent to
develop or otherwise extract value from the discovery. When this is
no longer the case, the costs are written off.
When proved reserves of oil and natural gas are determined,
development is sanctioned and production (rather than testing)
commences, the relevant expenditure is transferred to development
assets within tangible fixed assets. At that point, the Company
will begin to depreciate the assets over the course of their useful
life.
Tangible capitalised development costs
Expenditure on the drilling of development wells, including
unsuccessful development or delineation wells, and the
construction, installation or completion of infrastructure
facilities such as storage tanks, is capitalised within tangible
fixed assets as development costs.
Development assets are accumulated on a field by field basis and
represent the cost of developing the commercial reserves discovered
and bringing them into production. Changes in the estimates of
commercial reserves or future field development are dealt with
prospectively.
Tangible capitalised development costs are assessed for
impairment annually.
Production assets
The net book values of production assets are depreciated on a
field by field basis using the unit of production method by
reference to the ratio of production in the period to the related
commercial reserves of the field, taking into account any future
development expenditures at current prices necessary to bring those
reserves into production. The Group had no assets of this nature
during the year.
Impairment of tangible and intangible oil and gas assets
The Company assesses assets or groups of assets for impairment
annually. Individual assets are grouped for impairment assessment
purposes at the lowest level at which there are identifiable cash
flows that are largely independent of the cash flows of other
groups of assets. If any such indication of impairment exists, the
Company makes an estimate of the recoverable value of the asset. An
asset group's recoverable amount is the higher of its fair value
less costs to sell and its value in use. Where the carrying amount
of an asset group exceeds its recoverable amount, the asset group
is considered impaired and is written down to its recoverable
amount. In assessing value in use, the estimated future cash flows
are adjusted for the risks specific to the asset group and are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of
money.
The Company has no assets with an indefinite useful life.
Licences
Exploration licence costs capitalised within intangible assets
are reviewed at each reporting date to confirm that there is no
indication that the carrying amount exceeds the recoverable amount.
This review includes confirming that exploration drilling is still
under way or committed or that it has been determined, or work is
under way to determine, that the discovery is economically viable
based on a range of technical and commercial considerations and
sufficient progress is being made on establishing development plans
and timing. If no future activity is planned, the remaining balance
of the licence costs is written off. Upon recognition of proved
reserves and internal approval for development, the relevant
expenditure is transferred to property, plant and equipment.
Intangible capitalised development costs
Expenditure incurred on the development of solutions, processes
and systems that can be utilised within the marginal field
initiative is capitalised within tangible fixed assets as
development costs.
Intangible capitalised development costs are assessed for
impairment annually.
Fixtures and fittings, equipment
Office furniture, fittings and equipment is stated at cost less
accumulated depreciation and any impairment losses. The initial
cost of an asset comprises its purchase price, any costs directly
attributable to bringing the asset into operation, the initial
estimate of any decommissioning obligation, if any, and, for
qualifying assets, borrowing costs.
Office furniture, fittings and equipment is depreciated on a
straight-line basis over its expected useful life. The useful life
of the Company's office furniture, fittings and equipment is as
follows:
Office equipment 3 to 15 years
Office furniture, fixtures 5 to 15 years
and fittings
The expected useful lives and residual values of office
furniture, fittings and equipment are reviewed on an annual basis
and, if necessary, changes in useful lives are accounted for
prospectively. The carrying value of office furniture, fittings and
equipment is reviewed for impairment whenever events or changes in
circumstances indicate the carrying value may not be recoverable.
An item of office furniture, fittings and equipment is derecognised
upon disposal or when no future economic benefits are expected to
arise from the continued use of the asset. Any gain or loss arising
on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the
item) is included in the consolidated income statement in the
period the item is derecognised.
Other long-term assets
Long term assets usually in the form of deposits or investments,
are recognised initially at fair value and subsequently measured at
amortised cost less any provisions for impairment. A provision for
impairment is established when there is objective evidence that the
Company will not benefit from cash flows of an amount at least
equal to the carrying value of the asset.
Financial instruments
Trade and other receivables
Trade and other receivables are recognised initially at fair
value and subsequently measured at amortised cost using the
effective interest method, less any provisions for impairment. A
provision for impairment is established when there is objective
evidence that the Company will not be able to collect all amounts
due. The amount of the provision is the difference between the
asset's carrying amount and the present value of estimated future
cash flows, discounted at the original effective rate. The carrying
amount of the asset is reduced through the use of an allowance
account and the amount of the loss is recognised in the
consolidated income statement within administrative costs.
Subsequent recoveries of amounts previously written off are
credited against administrative costs in the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, and other
short-term, highly liquid investments that are readily convertible
to a known amount of cash and are subject to an insignificant risk
of change in value.
Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest of the assets of the Group after deducting all of
its liabilities.
Trade and other payables
Trade payables are non interest bearing and are stated initially
at fair value and then amortised cost.
Equity instruments
Equity instruments issued by the Company are recorded at the
proceeds received, net of direct issue costs.
Asset retirement provisions
The Company recognises the fair value of estimated asset
retirement provisions related to well sites as a liability when new
wells are drilled. The asset retirement cost is recorded as part of
the cost of the related long-lived asset at an amount that is equal
to the initial estimated fair value of the asset retirement
provision. Fair value is estimated using the present value of the
future estimated cash flows, adjusted for inflation, using the
Company's credit adjusted risk-free interest rate.
Changes in the estimated provision resulting from revisions to
estimated timing or amount of undiscounted cash flows are
recognised as a change in the asset retirement provision and the
related asset retirement cost. Actual retirement expenditures
incurred are charged against the provisions in the period incurred.
Over provisions and under provisions are set off against profit for
the period in which the over or under provision is recognised.
Employee Benefit Trust
The assets and liabilities of the Employee Benefit Trust are
brought onto the balance sheet of the Company. Shares held by the
trust are consolidated as a deduction from equity.
Performance Share Plan costs
The fair value of awards granted is recognised as an employee
expense with a corresponding increase in equity. The fair value is
measured at grant date, using an appropriate pricing model taking
into account the terms and conditions upon which the award was
granted, and is spread over the period during which the awards
vest. The amount recognised as an expense is adjusted to reflect
the actual number of share awards that vest in the same period. At
each balance sheet date, the Company revises its estimates of the
number of options that are expected to vest. The Company recognises
the impact of the revision to original estimates, if any, in the
income statement, with a corresponding adjustment to equity.
Foreign currency translation
The Company's functional currency is Sterling. Enegi Oil Inc.'s
(a subsidiary) functional currency is Canadian dollars. The Group's
presentation currency is Sterling.
In preparing the financial statements of the individual
companies, transactions in foreign currencies other than the
functional currency (foreign currencies) are recorded at the rates
of exchange prevailing on the dates of the transactions. At each
balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the balance sheet date. Non-monetary items carried at
fair values that are denominated in foreign currencies are
translated at the rates prevailing at the date when the fair values
were determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not re-translated.
Exchange rate differences arising on the settlement of monetary
items and on the retranslation of monetary items are included in
profit or loss for the period. Exchange rate differences arising on
the retranslation of non-monetary items carried at fair value are
included in profit or loss for the period except for differences
arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such
non-monetary items, any exchange component of that gain or loss is
also recognised directly in equity.
On consolidation, the assets and liabilities of the Group's
foreign operations are translated at exchange rates prevailing on
the balance sheet date. Income and expense items are translated at
the average exchange rates for the period, unless exchange rates
fluctuate significantly during that period, in which case the rate
at the date of the transaction is used.
Exchange differences that arise on long term intra-Group loans
are recognised in the income statement in the individual financial
statements of each Group company.
Income taxes
Current income tax
Current income tax assets and liabilities for the current and
prior period are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that are enacted or
substantively enacted at the balance sheet date.
Deferred income tax
Deferred income tax is provided using the liability method on
temporary differences at the consolidated balance sheet date
between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred income tax assets are recognised for all deductible
temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable
income will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused
tax losses can be utilised.
The carrying value of deferred income tax asset is reviewed at
each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable income will be available to
allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each
consolidated balance sheet date and are recognised to the extent
that it has become probable that future taxable income will allow
the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply in the period when the asset
is realised or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted at the
balance sheet date.
Deferred income tax relating to items recognised directly in
equity is recognised in equity and not in the income statement.
Deferred income tax assets and liabilities are offset, if a
legally enforceable right exists to set off current assets against
current income tax liabilities, and the deferred income taxes
relate to the same taxable entity and the same taxation
authority.
Sales tax
Revenues, expenses and assets are recognised net of the amount
of sales tax except:
-- Where the sales tax incurred on a purchase of assets or
services is not recoverable from the taxation authority, in which
case the sales tax is recognised as part of the cost of acquisition
of the asset or as part of the expense item as applicable; and
-- Receivables and payables that are stated with the amount of sales tax included.
Accrued liabilities
Trade payables and accrued liabilities are carried at payment or
settlement amounts. Where agreements have been reached with
suppliers to discount the amount payable, the discount is only
recognised at the point at which it becomes unconditional.
Share capital
Issued share capital is recorded in the balance sheet at nominal
value with any premium at the date of issue being credited to the
share premium account. The share premium account is used to write
off directly related expenses of any share issue.
Share-based transactions
From time to time, the Company may pay for goods or services
through the issue of new shares. The cost of such equity-settled
transactions is recognised in the income statement, together with a
corresponding increase in equity, in the period during which the
goods or services are received.
The value of such share based payments is measured by reference
to the fair value of the goods or services received or the market
value of the shares issued, whichever value is more readily
determinable.
Warrants
From time to time, the Company may issue warrants to suppliers
as partial payment for goods or services or to investors or
advisers in relation to the raising of new equity finance. When
warrants are issued as partial payment for goods or services
related to operations, the fair value of those warrants is
recognised as a cost in the income statement. When warrants are
issued in relation to the raising of new equity finance, the fair
value of those warrants is set off against share premium. Warrants
issued but not exercised are held in a warrant reserve within
equity.
Investment in subsidiary undertakings
Investments in subsidiary undertakings are recorded at cost plus
incidental expenses less any provision for impairment. Impairment
reviews are performed by the Directors when there has been an
indication of potential impairment.
Critical accounting judgments and estimates in applying the
Group's accounting policies
The preparation of consolidated financial statements in
conformity with IFRS requires management to make judgments and
estimates that affect the reported amounts of assets and
liabilities at the date of the consolidated financial statements
and the reported amounts of expenses during the reporting period.
Actual results could differ from those estimates. In the process of
applying the Group's accounting policies, management have made the
following estimates that may have a significant effect on the
amounts recognised in the financial statements:
Asset retirement obligation: Under the terms of the lease and
licence, the Group is obliged to return the associated land to the
state it was in when the lease and licence were first awarded. The
Group has recognised a provision in its consolidated statement of
financial position in relation to this future obligation. This
provision is based on a series of assumptions and estimates which
are set out in Note 9.
Exploration costs: Under the successful efforts method of
accounting for exploration costs, such costs are capitalised as
intangible assets by reference to the appropriate pool costs, and
are assessed for impairment when circumstances suggest that the
carrying amount may exceed its recoverable value. This assessment
involves judgment as to (i) the likely future commerciality of the
asset and when such commerciality should be determined, (ii) future
revenues and costs pertaining to any wider cost pool with which the
asset in question is associated, and (iii) the discount rate to be
applied to such revenues and costs for the purpose of deriving
recoverable value.
Impairment of tangible and intangible oil and gas assets: The
Company assesses assets or groups of assets for impairment
annually. Individual assets are grouped for impairment assessment
purposes at the lowest level at which there are identifiable cash
flows that are largely independent of the cash flows of other
groups of assets. If any such indication of impairment exists, the
Company makes an estimate of the recoverable value of the asset. An
asset group's recoverable amount is the higher of its fair value
less costs to sell and its value in use. Where the carrying amount
of an asset group exceeds its recoverable amount, the asset group
is considered impaired and is written down to its recoverable
amount. In assessing value in use, the estimated future cash flows
are adjusted for the risks specific to the asset group and are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of
money.
Capitalisation of Intangible Development Costs: The Company
capitalises expenditure on the development of engineering solutions
adopted in the Marginal Field Initiative such that the key
engineering principles of those solutions could be easily
replicated for application to other projects. To recognise the
advancing nature of technology and solutions within the field of
engineering the Company assesses for impairment annually.
Impairment of Investments: The Company assesses the carrying
value of its investment in all entities in which its holds an
equity interest on an annual basis. It considers impairing such
investments if the underlying value of the investment is deemed to
not support the carrying value of the investment.
Finance Costs
Finance costs include costs associated with the Company's
management of cash, cash equivalents and debt. To the extent
interest expense on borrowings are included within finance costs,
the interest expense is calculated using the effective interest
rate method.
3. SEGMENTAL INFORMATION
IFRS 8 Operating Segments requires that the segments should be
reported on the same basis as the internal reporting information
that is provided to the chief operating decision-maker. The group
adopts this policy and the chief operating decision-maker has been
identified as the Board of Directors of the Company. The Directors
consider there to be two operating and reportable segments, being
that of the development of the marginal field initiative and the
operations in western Newfoundland.
Internal reports reviewed regularly by the Board provide
information to allow the chief operating decision-maker to allocate
resources and make decisions about the operations.
Over the past year, given the state of the Group's operations,
the chief operating decision maker relies primarily on an
understanding of the cash requirements of the business to make
decisions about how resources are to be allocated across the
business. The oil and gas industry has experienced a significant
downturn which has affected the operations of the Group.
Nevertheless, the Company has been able to generate new investment
into each operating segment. In western Newfoundland the new
investment has taken the form of a production sharing agreement
under which its operating costs are covered by a third party.
The marginal field initiative operating segment is contained
within the parent company, Nu-Oil and Gas plc. The results of that
operating segment are shown under the Consolidated Income Statement
on page 32 and its net liabilities are shown on page 34 via the
Company Statement of Financial Position.
The operations in western Newfoundland are conducted by Nu-Oil
and Gas plc.'s wholly owned subsidiary Enegi Oil Inc. Management
have reduced costs significantly over recent periods such that its
reported loss for the period is GBP134,000 (2017: GBP180,000),
excluding intercompany items. It should be noted that the loss for
2018 includes an amortisation cost of GBP118,000 from the adoption
of the accounting policy with respect to Exploration Licence
EL1070.
Excluding intercompany balances, the net assets of Enegi Oil
Inc. at 2018 are as follows:
2018 2017
GBP'000 GBP'000
----------------------------- --------- ---------
Non-current assets
Tangible fixed assets 4 9
Intangible fixed assets 326 453
Other long-term assets 477 493
----------------------------- --------- ---------
807 955
----------------------------- --------- ---------
Current assets
Trade and other receivables 34 15
Cash and cash equivalents - -
----------------------------- --------- ---------
34 15
Total assets 841 970
Current liabilities
Trade and other payables (196) (222)
Due to related parties (183) (189)
----------------------------- --------- ---------
(379) (411)
----------------------------- --------- ---------
Non-current liabilities
Provisions (470) (489)
----------------------------- --------- ---------
Total liabilities (849) (900)
----------------------------- --------- ---------
4. ADMINISTRATIVE EXPENSES
Administrative expenses included in the consolidated income
statement are as follows:
2018 2017
GBP'000 GBP'000
----------------------------------------------- --------- ---------
Depreciation, amortisation and impairment
of assets (Note 8) 341 367
Consulting - 137
Employee benefit expense (Note 17) 264 463
Directors fees (Note 17) 210 96
Site operations - 12
Legal and professional 219 118
Accounting and finance fees 153 62
Write back of overstated liabilities - (46)
Business travel 41 33
Office running costs 42 14
Rent and Rates 6 22
Recharge of costs incurred on the development
of MFDevCo (235) (211)
Provision for receivables due from MFDevCo 595 390
Other expenses 36 -
----------------------------------------------- --------- ---------
1,672 1,457
----------------------------------------------- --------- ---------
Any geological or geophysical costs which are not capitalised
have been charged as professional fees.
Auditors' remuneration
During the year, the Group obtained various services from its
auditors, the costs of which are set out below:
2018 2017
GBP'000 GBP'000
------------------------------------------------ --------- ---------
Fees payable to company's auditors and
its associates for the audit of parent
company and consolidated financial statements 35 35
Fees payable to company's auditors and
its associates for other services - 10
Fees for tax compliance services 3 3
38 48
------------------------------------------------ --------- ---------
5. FINANCE COSTS
2018 2017
GBP'000 GBP'000
------------------ --------- ---------
Interest expense 206 214
206 214
------------------ --------- ---------
On 25 November 2013, the Company obtained a loan of GBP1,000,000
from Shard Capital Management. Under the terms of the loan, which
had a term of 12 months, the Company was due to pay an interest
amount of GBP200,000.
In December 2014, the Company obtained a further loan of
GBP200,000 from Shard Capital Management. Under the terms of the
loan, the Company was due to pay a further GBP120,000 interest on
the original loan of GBP1,000,000 from November 2013 and GBP20,000
on the additional loan of GBP200,000 for a total interest expense
in the period of GBP140,000. Interest continues to accrue as shown
above and Shard Capital Management holds security over PL2002-01(A)
for the debt and the Company has the right to convert the debt to
equity.
6. TAXATION
The Group has no current or deferred tax charge in the current
or previous financial year. The Group has a net unrecognised
deferred income tax asset. Differences were accounted for as
follows:
2018 2017
GBP'000 GBP'000
------------------------------ --------- ---------
Loss before tax (1,878) (1,671)
Statutory income tax rate 19.00% 19.75%
-------------------------------- --------- ---------
Expected income tax recovery (357) (330)
Effect of overseas tax
rates (21) (70)
Permanent difference 21 11
Transferred to losses 357 389
Total tax - -
-------------------------------- --------- ---------
The deferred income tax asset not recognised at 30 June 2018 is
comprised of the following:
2018 2017
GBP'000 GBP'000
---------------------------------- --------- ---------
Non-capital loss carried forward 8,377 8,020
Canadian Pool Assets 1,746 1,805
10,123 9,825
---------------------------------- --------- ---------
As at 30 June 2018, the Group had Canadian Development Expense
pool carry forward of GBP3.2 million, Canadian Exploration Expense
pool carry forward of GBP0.3 million and non-capital loss carry
forward balances of approximately GBP19.54 million (GBP1.82 million
will expire in 2026, GBP2.16 million will expire in 2027, GBP1.19
million will expire in 2028, GBP2.75 million will expire in 2029,
GBP0.80 million will expire in 2030, GBP1.36 million will expire in
2031, GBP1.09 million will expire in 2032, GBP1.59 million will
expire in 2033, GBP1.0 million will expire in 2034, GBP4.57 million
will expire in 2035, GBP0.25 million will expire in 2036, GBP0.75
million will expire in 2037 and GBP0.21 million will expire in
2038) that are available to reduce future years' taxable
income.
Deferred tax assets were not recognised as there is significant
uncertainty regarding the timing of future profits against which
these assets could be utilised.
7. LOSS PER SHARE (EXPRESSED IN PENCE PER SHARE)
Loss per share amounts are calculated by dividing the loss for
the year by the weighted average number of common shares in issue
during the year.
2018 2017
GBP'000 GBP'000
-------------------------------------------- -------------- ------------
Loss attributable to shareholders of the
Company (1,878) (1,671)
Weighted average number of shares in issue 1,257,654,599 708,074,539
Fully diluted weighted average number of
shares in issue 1,257,654,599 708,074,539
--------------------------------------------- -------------- ------------
Basic loss per share (expressed in pence
per share) (0.1p) (0.2p)
Diluted loss per share (expressed in pence
per share) (0.1p) (0.2p)
--------------------------------------------- -------------- ------------
8. TANGIBLE FIXED ASSETS AND INTANGIBLE ASSETS
Group
As at 30 June 2018, the cost of tangible fixed assets consisted
of the following:
Restated
tangible
Restated capitalised Fixtures
oil and development and fittings, Asset Retirement Restated
gas properties costs equipment Obligation Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ---------------- ------------- --------------- ----------------- ---------
Balance at 01 July
2016 3,842 14,080 423 799 19,144
Foreign exchange
movement 111 418 6 11 546
-------------------- ---------------- ------------- --------------- ----------------- ---------
Balance at 30 June
2017 3,953 14,498 429 810 19,690
Foreign exchange
movement (130) (491) - - (621)
-------------------- ---------------- ------------- --------------- ----------------- ---------
Balance at 30 June
2018 3,823 14,007 429 810 19,069
-------------------- ---------------- ------------- --------------- ----------------- ---------
Balances at 01 July 2016 have been restated to include the
transfer between tangibles and intangibles performed in 2017. There
is no impact to the balances at 30 June 2017 and 30 June 2018.
As at 30 June 2018, the accumulated depreciation and impairment
of tangible fixed assets consisted of the following:
Tangible
capitalised Fixtures
Oil and development and fittings, Asset Retirement
gas properties costs equipment Obligation Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ---------------- ------------- --------------- ----------------- ---------
Balance at 01 July
2016 (3,842) (14,080) (5) (789) (18,716)
Charge for the year - - (188) (1) (189)
Foreign exchange
movement (111) (418) (3) (11) (543)
--------------------- ---------------- ------------- --------------- ----------------- ---------
Balance at 30 June
2017 (3,953) (14,498) (196) (801) (19,448)
Charge for the year - - (46) (1) (47)
Foreign exchange
movement 130 491 - - 621
--------------------- ---------------- ------------- --------------- ----------------- ---------
Balance at 30 June
2018 (3,823) (14,007) (242) (802) (18,874)
--------------------- ---------------- ------------- --------------- ----------------- ---------
As at 30 June 2018, the net book value of tangible fixed assets
was:
Tangible
capitalised Fixtures
Oil and development and fittings, Asset Retirement
gas properties costs equipment Obligation Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------------------ -------------- --------------- ----------------- ---------
Net book value at 30
June 2018 - - 187 8 195
Net book value at 30
June 2017 - - 233 9 242
---------------------- ------------------ --------------- --------------- ----------------- ---------
As at 30 June 2018, the cost of intangible oil and gas assets
consisted of the following:
Intangible Restated
capitalised capitalised
development exploration
costs costs Licences Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ------------- ------------- --------- ---------
Balance at 01 July 2016 899 1,943 472 3,314
Foreign Exchange Movement - 43 14 57
--------------------------- ------------- ------------- --------- ---------
Balance at 30 June 2017 899 1,986 486 3,371
Foreign Exchange Movement - (67) (16) (83)
--------------------------- ------------- ------------- --------- ---------
Balance at 30 June 2018 899 1,919 470 3,288
--------------------------- ------------- ------------- --------- ---------
Balances at 01 July 2016 have been restated to include the
transfer between tangibles and intangibles performed in 2017. There
is no impact to the balances at 30 June 2017 and 30 June 2018
As at 30 June 2018, the accumulated amortisation and impairment
of intangible oil and gas assets consisted of the following:
Intangible
capitalised Capitalised
development exploration
costs costs Licences Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ------------- ------------- --------- ---------
Balance at 01 July 2016 (51) (1,503) (472) (2,026)
Impairment charge for
the year (178) - - (178)
Foreign Exchange Movement - (30) (14) (44)
--------------------------- ------------- ------------- --------- ---------
Balance at 30 June 2017 (229) (1,533) (486) (2,248)
Impairment charge for
the year (179) - - (179)
Amortisation charge for
the year - (115) - (115)
Foreign Exchange Movement - 51 16 67
--------------------------- ------------- ------------- --------- ---------
Balance at 30 June 2018 (408) (1,597) (470) (2,475)
--------------------------- ------------- ------------- --------- ---------
As at 30 June 2018, the net book value of intangible oil and gas
assets was:
Capitalised Capitalised
development exploration
costs costs Licences Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ------------- ------------- ----------- ----------
Net book value at 30 June
2018 491 322 - 813
Net book value at 30 June
2017 670 453 - 1,123
--------------------------- ------------- ------------- ----------- ----------
During the prior year, the Directors conducted a review of the
carrying value of the Group's tangible and intangible fixed assets
and after considering the implied valuation of discounted cash flow
models that consider the future productivity of the PAP#1 well the
Directors concluded that its producing Canadian assets should
remain fully impaired. The Company applied its accounting policy to
the intangible capitalised development costs and has retained value
on Shoal Point on EL1070 pending the outcome of a regulatory
assessment of fracking.
Tangible assets attributable to the company equalled GBP187,000
(2017: GBP233,000). Intangible assets for the company equalled
GBP491,000 (2017: GBP670,000).
9. 9. PROVISIONS
Under the terms of the lease and licence, the Company is obliged
to return the associated land to the state it was in when the lease
and licence were first awarded. This involves closing in any wells
and removing the well-head equipment, removing any buildings,
engineering structures, materials and waste from the site and then
replanting the land to restore it to its original condition. It is
not expected that the liability contemplated by the provision would
be payable before 2023 as PL2002-01(A) was extended until 11 August
2022 during the year.
The Company recognises this future obligation in its
consolidated statement of financial position as a provision. The
following table presents the reconciliation of the beginning and
ending aggregate carrying amount of the obligations associated with
the retirement of the Company's oil and gas assets:
2018 2017
GBP'000 GBP'000
----------------------------- --------- ---------
Balance at beginning of
year 489 466
Effects of foreign currency
translation (15) 32
Effect of discount rate
unwinding (4) (9)
Balance at end of year 470 489
------------------------------- --------- ---------
The Group is confident that the provision taken at 30 June 2018
accurately reflects the current value of its future
obligations.
At 30 June 2018, the estimated future cash flows required to
settle this obligation totalled GBP470,000. Assuming an inflation
rate of 2.0%, the undiscounted future cost of this obligation was
GBP500,000. The liability for the expected cash flow requirement
has been discounted using a pre-tax risk-free rate of 1.5%. This
obligation will be settled based on the operating lives of the
underlying assets, which currently are estimated to be from one to
fifteen years with the majority of costs expected to occur between
2022 and 2023. Any settlement amounts will be funded from general
corporate resources at the time of retirement and removal.
10. OTHER LONG-TERM ASSETS AND INVESTMENTS
As at 30 June 2018, the Group's other long-term assets consisted
of the following:
2018 2017
GBP'000 GBP'000
------------------ --------- ---------
Licence deposits 477 493
477 493
------------------ --------- ---------
The licence deposits are held by the relevant regulatory body.
They were paid over when the Company acquired its stakes in the
lease and licence and will either be returned at the expiry of the
lease and licence or set off against royalty payments if and when
they become due.
The majority of the licence deposits relate to the Company's
activities on production lease PL2002-01 in western Newfoundland.
The production lease expired in August 2012 and as the lease
contained a producing well, production lease PL2002-01(A) was
issued which expires in August 2022 following the recent award of a
5-year extension to the expiry of PL2002-01(A).
As at 30 June 2018, the Company's investments consisted of the
following:
2018 2017
GBP'000 GBP'000
------------------------------------------- --------- ---------
Investment in Group Companies at 1 July 478 516
Impairment (152) (38)
Investment in Group Companies at 30 June 326 478
------------------------------------------- --------- ---------
During the year, the Directors conducted a review of the
carrying value of the Company's other long-term assets, which
consists of investments in Group companies and in MFDevCo as
described in Note 21. The balance represents the carrying value of
the investment in Enegi Oil Inc. Impairment in the period reflects
the application of the Group's accounting policy with respect to
the amortisation of Enegi Oil Inc.'s capitalised exploration
costs.
The Group holds a 50% interest in MFDevCo in which it has
invested as part of its marginal or stranded field strategy. Its
investment has been accounted for using the equity method and as is
deemed at this point to have zero value as the cumulative losses in
MFDevCo exceed the investment that has been made by the Group.
Losses at this stage of MFDevCo's development are as expected as
MFDevCo seeks to establish itself.
The Group has no obligations to contribute to any excess losses
or creditors that reside within MFDevCo.
11. TRADE AND OTHER RECEIVABLES
As at 30 June 2018, trade and other receivables consisted of the
following:
2018 2017
GBP'000 GBP'000
----------------------------------- --------- ---------
Sales taxes receivable 178 162
Prepayments and other receivables 815 760
------------------------------------ --------- ---------
993 922
----------------------------------- --------- ---------
At 30 June 2018, trade and other receivables were within trading
terms and therefore considered to be fully recoverable and as a
result there was no provision for impairment (2017: GBPnil).
The trade and other receivables showing in the Company's
statement of financial position relate to sales taxes receivable of
GBP168,000 (2017: GBP154,000) and prepayments and other receivables
of GBP790,000 (2017: GBP753,000).
The majority of the Group's other receivables relate to services
that it has provided to MFDevCo as part of its marginal field
strategy. The Group expects these balances to be repaid or
converted to equity in MFDevCo in the course of the next 12 months.
Nevertheless, the Group has decided to continue to provide against
receivables balances due from MFDevCo over 4 years to reflect the
pre-revenue nature of the business, reversing such provision upon
settlement or conversion.
12. DUE TO RELATED PARTIES
Group
The Group incurred the following charges during the year with
companies related by way of directors or common shareholders:
2018 2017
GBP'000 GBP'000
------------------- --------- ---------
RMRI Group (U.K.) 208 259
208 259
------------------- --------- ---------
The transactions above include Directors' Fees of GBP150,000 for
both fees attributable to the year and prior years in which
directors deferred fees due to the financial state of the Group.
Transactions occurred in the normal course of operations and, where
applicable, are measured at the exchange amount, which is the
amount of consideration established and agreed to by the related
parties.
The balances owed to related parties outlined below are,
unsecured, not guaranteed, and are to be settled under normal
credit terms, as would have applied with unrelated parties, and
have arisen from the transactions referred to above.
2018 2017
GBP'000 GBP'000
-------------------- --------- ---------
RMRI Group (U.K.) 358 855
RMRI (Canada) Inc. 183 189
541 1,044
-------------------- --------- ---------
In addition to the above, GBP556,000 (2017: GBP529,000) is
recorded in the Company's accruals as Applications for Payment but
not yet invoiced. Applications for Payment are utilised where there
is uncertainty with respect to the timing of payment so as to not
generate a VAT liability for the service provider until payment is
made.
Alan Minty and Damian Minty are shareholders in the related
parties listed above and RMRI holds a 50% interest in MFDevCo.
Management believe that the related parties have been crucial to
the operation of the Company during the year. They expect the
related parties to continue to provide certain services to the
Company in the future. Any transactions with related parties are
approved by an independent director.
Company
In 2018 the Company was owed an additional GBP136,000 by its
principal trading subsidiary, Enegi Oil Inc. As a result of the
trading performance of Enegi Oil Inc. the Company has provided in
full against this additional receivable in 2018 and as such the
amount carried at 30 June 2018 was GBPnil.
Amounts owed by the Company to the companies listed above
totalled GBP358,000 (2017: GBP855,000). During the year the Company
incurred charges of GBP58,000, excluding Directors' fees from the
RMRI group companies.
13. ORDINARY SHARE CAPITAL AND SHARE PREMIUM ACCOUNT
In October 2015, the Company undertook a reorganisation of its
share capital. Under the Companies Act a company is unable to issue
shares at a subscription price which is lower than the nominal
value. Therefore, in order to raise additional funding a
reorganisation of the company's share capital was performed.
The reorganisation subdivided existing shares into new ordinary
shares with a nominal value of GBP0.001 and deferred shares with a
nominal value of GBP0.009. The deferred shares, amongst other
things, are not traded, do not receive dividends and do not have
voting rights. The issue of new ordinary shares will not require
the issuance of deferred shares to new subscribers. At the time of
the reorganisation 189,792,348 shares were in circulation.
At 30 June 2018, the Company had the following shares in
issue:
Number of Ordinary
shares Share capital
GBP'000
------------------------------------- -------------- ---------------
Issued ordinary shares of 0.1p each 1,364,027,131 1,364
Issued deferred shares of 0.9p each 189,792,348 1,708
-------------------------------------- -------------- ---------------
The weighted average number of ordinary shares in issue during
the year was 1,257,654,599 (2017: 708,074,539).
The movement in share capital and share premium in the current
is as follows:
Group and Company Number of Number of Ordinary Share premium Total
Ordinary Deferred share capital account
Shares (thousands) Shares (thousands) GBP'000 GBP'000
GBP'000
-------------------- -------------------- -------------------- --------------- -------------- ---------
At 1 July 2017 1,048,792 189,792 2,757 28,671 31,428
Share Placements
and exercise of
Warrants 315,235 - 315 2,391 2,706
Effect of Warrants - - - - -
At 30 June 2018 1,364,027 189,792 3,072 31,062 34,134
-------------------- -------------------- -------------------- --------------- -------------- ---------
Included in shares issued and fully paid are 860,000 shares
issued to the Employee Benefit Trust.
As at 30 June 2018, the warrants relating to the Company's
ordinary share capital had been issued:
Exercise
Number of shares price
GBP Expiry
date
---------------------------------------- ------------------- --------- ---------
Warrants issued to Company's Nominated
Advisor 9,416,885 0.0063 6/11/21
Warrants issued to Novum Securities 13,043,478 0.0115 28/03/21
Warrants issued to Beaufort Securities
Ltd. 10,000,000 0.011 27/07/22
----------------------------------------- ------------------- --------- ---------
14. TRADE AND OTHER PAYABLES
As at 30 June 2018, the Group's trade and other payables
consisted of the following:
2018 2017
GBP'000 GBP'000
--------------------------------- --------- ---------
Trade payables 481 367
Accruals 1,157 1,532
Taxation and social security 98 10
Loan repayable to Shard Capital 1,643 1,780
Other payables 2 92
3,381 3,781
--------------------------------- --------- ---------
On 25 November 2013, the Company obtained a loan of GBP1,000,000
from Shard Capital Management. Under the terms of the loan, which
had a term of 12 months, the Company was due to pay an interest
amount of GBP200,000.
In December 2014, the Company obtained a further loan of
GBP200,000 from Shard Capital Management. Under the terms of the
loan, the Company was due to pay a further GBP120,000 interest on
the original loan of GBP1,000,000 from November 2013 and GBP20,000
on the additional loan of GBP200,000 for a total interest expense
in the period of GBP140,000. The loan and interest are repayable on
demand. In the current year additional interest of GBP206,000 has
been accrued on the loan balance.
The trade and other payables shown in the Company's statement of
financial position relate to trade payables and accruals of
GBP1,531,000 (2017: GBP1,768,000), other payables GBP11,000 (2017:
GBP11,000) and Loan repayable to Shard Capital of GBP1,643,000
(2017: GBP1,780,000).
15. CASH USED IN OPERATIONS
During the year ended 30 June 2017, the net change in the
Group's working capital balances were made up as follows:
2018 2017
GBP'000 GBP'000
------------------------------------------- --------- ---------
Loss before income tax (1,878) (1,671)
Decrease in related party payable (503) (470)
Decrease in trade and other payables (57) (823)
Depreciation, amortisation and impairment 341 367
(Increase) / decrease in receivables (71) 228
Other non-cash movements 12 (6)
Cash flows used in operating activities (2,156) (2,375)
-------------------------------------------- --------- ---------
During the year ended 30 June 2018, the net change in the
Company's non-cash working capital balances was made up as
follows:
2018 2017
GBP'000 GBP'000
------------------------------------------- --------- ---------
Loss before income tax (1,954) (1,606)
Decrease in related party payable (497) (476)
Decrease in trade and other payables (31) (599)
(Increase) / decrease in receivables (51) 42
Depreciation, amortisation and impairment 377 226
Other non-cash movements - 38
Cash flows used in operating activities (2,156) (2,375)
-------------------------------------------- --------- ---------
16. PERFORMANCE SHARE PLAN
The Company commenced the operation of a Performance Share Plan
which is an equity incentive scheme at the time of the Company's
initial public offering in March 2008. The remuneration committee
oversees the Performance Share Plan, approves the subscription
price of awards under the Plan and any criteria to be satisfied
before exercise is permitted, and monitors the effectiveness of the
Performance Share Plan as an incentive to the executives and
staff.
Under the terms of the Plan, an employee benefit trust ('EBT')
subscribed for ordinary shares in the Company. The trust is
administered by Appleby Limited. The trustee can distribute shares
at its discretion directly to beneficiaries on the recommendation
of the Board. All administrative costs associated with the EBT are
met by the Company. The Employee Benefit Trust owns shares to be
distributed at the discretion of the trustees and the employee owns
any value in the shares in excess of the subscription price.
On 20 March 2008, the Company placed 860,000 shares into the
EBT. The market price of the shares was GBP1.81 each and the market
value of the shares was GBP1,556,600. At 30 June 2018, the EBT
jointly owned 860,000 shares in the Company with a nominal value of
GBP8,600, representing 0.06% of the allotted share capital of the
Company. None of the shares held were under option or conditionally
gifted.
Under the Performance Share Plan, the options outstanding to
Directors and Senior Management, as approved by the Company's
Remuneration Committee, is as follows:
Name Already Average Vest To Vest Average Total Options
Vested Price (GBP) Vest Price
(GBP)
------------------ ----------- ------------- -------- ------------ --------------
Alan Minty 20,000,000 0.006 - - 20,000,000
Damian Minty 20,000,000 0.006 - - 20,000,000
Tejvinder Minhas 20,000,000 0.006 - - 20,000,000
Nigel Burton 8,000,000 0.006 8,000,000
Frank Jackson 8,000,000 0.006 - - 8,000,000
Mike Bowman 4,000,000 0.006 4,000,000
------------------ ----------- ------------- -------- ------------ --------------
17. EMPLOYEES AND DIRECTORS
During the year, the Group incurred employee benefit costs as
follows:
2018 2017
GBP'000 GBP'000
----------------------- --------- ---------
Wages and salaries 218 412
Directors' fees 210 108
Social security costs 46 51
474 571
----------------------- --------- ---------
During the year, the average monthly number of people employed
(including executive directors) was as follows:
2018 2017
Number Number of
of employees employees
---------------------------------- -------------- -----------
Average monthly number of people
employed 5 5
------------------------------------ -------------- -----------
The Directors during the year were:
Date of appointment Date of
resignation
--------------------------------------- ----- ---------------------- -------------
Alan Minty 13 September -
2007
Nigel Burton 20 October 2015
Damian Minty 1 October 2011 -
Prof. Mike Bowman (Non-executive 31 March 2014 -
director)
Frank Jackson (Non-executive director) 1 October 2011 -
Tejvinder Minhas (Non-executive 28 March 2013 -
director)
--------------------------------------- ----- ---------------------- -------------
Effective July 2017, Tejvinder Minhas, Executive Director, moved
to a position of Non-Executive Director with the Company. The
executive directors are considered to be the key management
personnel of the Group. Their aggregate remuneration was as
follows:
2018 2017
GBP'000 GBP'000
------------------------------ --------- ---------
Short-term employee benefits 168 400
Directors' fees 160 108
328 508
------------------------------ --------- ---------
The largest director emoluments for the year were GBP160,000
(2017: GBP190,000).
18. COMMITMENTS AND CONTINGENCIES
Capital commitments
Under the terms of the Group's interest in its petroleum lease,
the Group commenced a seismic research programme prior to 12 August
2007 as required. The cost to complete the seismic research
programme is GBP1,178,250. None of the costs that relate to the
seismic programme have been incurred to date.
19. FINANCIAL INSTRUMENTS
The Company's principal financial instruments comprise cash,
trade and other receivables, trade and other payables and accruals
and amounts owed to related parties. The carrying values of the
Company's financial instruments approximate their fair values due
to the short-term maturity and normal trade credit terms of these
instruments.
20. FINANCIAL RISK MANAGEMENT
The Group is subject to certain financial risks. The Directors
consider the following risk factors, which are not exhaustive,
particularly relevant to the Group's business activities:
Currency risk: The Group is exposed to changes in the exchange
rate between the British pound and Canadian dollar (CAD). Such
movements could significantly impact the financial performance of
the Group. The Group's principal operating subsidiary holds a
significant proportion of its cash and cash equivalents in CAD and
has a functional currency of CAD.
At each period end, assets and liabilities that are held in a
currency other than the Group's reporting currency are translated
into sterling. The resultant foreign currency gain or loss arising
is reflected in the consolidated statement of comprehensive income
(SOCI) in the period in which it arises. During the year, a further
10% gain in the value of CAD versus the pound would have led to an
increase in the amount recognised in the SOCI of GBP20,000 (2017:
increase of GBP35,000).
Going forward, the Group will mitigate the effects of its
structural currency exposure by converting funds raised for
investment and operations into the relevant currency of the
investment or operations when the funds are raised. The Group's
policy will also be to hedge most of its foreign exchange exposure
at the point when a contractual obligation creates a forward
exposure. The Group's policy is not to undertake any speculative
currency positions.
Commodity prices: The Group's future revenues and cash flows
will come primarily from the sale of oil and gas. If oil and gas
prices should fall below and remain below the Group's cost of
production for any sustained period, the Group may experience
losses and may be forced to curtail or suspend some or all of its
operations. In addition, the Group would also have to assess the
economic impact of low oil or gas prices on the Group's ability to
recover any losses which the Group may incur during this period and
on the Group's ability to maintain adequate reserves.
Oil and gas prices are volatile and are influenced by factors
beyond the Group's control such as supply and demand, political and
social developments, exchange rates, interest rates and
inflation.
Liquidity risk: The Group has based its future projections on
achieving commercial production from the implementation of the
Marginal Field Initiative business model. The implementation of the
Marginal Field Initiative business plan will require an injection
of new capital into the business, but the value that additional
capital is able to generate should significantly exceed the effect
of any potential shareholder dilution.
The Company's approach to managing liquidity is to ensure, as
far as possible, that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and stressed
conditions. The Company has access to funding and these are
considered sufficient to meet the anticipated funding requirements.
Rolling cash flow forecasts of the Company's liquidity requirements
are monitored to ensure it has sufficient cash to meet operational
needs over the next twelve months.
Counterparty risk: The Group shares working interests in its
offshore prospects with third parties. To the extent that these
third parties are unable to meet their obligations under the terms
of the exploration licence, the Group may face additional costs for
developing those assets. The Directors monitor the financial
positions of these working interest partners and look to minimise
the risk of additional costs through the use of farm-in and
farm-out arrangements if appropriate.
21. SUBSIDIARY COMPANIES AND INVESTMENTS
Principal Group investments
The principal Group investments are disclosed below. For a full
list of subsidiaries see annual return per Companies House. Other
than the effect of foreign exchange, transactions between
subsidiaries and between the parent Company and its subsidiaries
are eliminated on consolidation.
Country of Type of Subsidiary Group shareholding
Name Nature of business incorporation share / Investment
-------------------- ------------------------ ---------------- ---------- --------------- -------------------
Enegi Finance Intra-group finance
Limited provider UK Ordinary Subsidiary 100%
Gestion Resources Working interest UK Ordinary Subsidiary 100% via
Limited holder Enegi Oil
Inc.
Principal operating
Enegi Oil Inc. subsidiary Canada Ordinary Subsidiary 100%
Marginal Field
Development
Company (MFDevCo) Marginal field
Ltd. development solutions UK Ordinary Investment 50%
-------------------- ------------------------ ---------------- ---------- --------------- -------------------
All investments are held at cost less any provision for
diminution in value.
The registered office of each company is as follows:
Country of
Name Registered Address incorporation
--------------------------- --------------------------------------------- ---------------
Enegi Finance Limited 5th Floor, Castlefield House, Liverpool UK
Road,Manchester. M3 4SB
Gestion Resources 5th Floor, Castlefield House, Liverpool UK
Limited Road,Manchester. M3 4SB
Enegi Oil Inc. 36, Quidi Vidi Road, St. Johns, Newfoundland Canada
Marginal Field Development 5th Floor, Castlefield House, Liverpool UK
Company (MFDevCo) Road,Manchester. M3 4SB
Ltd.
--------------------------- --------------------------------------------- ---------------
Notes to the Financial Statements Ends
Non-Statutory Accounts
The figures for the years ended 30 June 2018 and 2017 do not
constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006. The figures for the year ended 30 June 2018
have been extracted from the statutory accounts for that year and
they have yet to be delivered to the Registrar of Companies. The
figures for the year ended 30 June 2017 have been extracted from
the statutory accounts for that year and have been delivered to the
Registrar of Companies.
An auditor's report was made on the statutory accounts for both
2018 and 2017. In each case the audit report was unqualified but
emphasised that there was a material uncertainty relating to
Group's ability to continue as a going concern.
No statement has been made by the auditor under Section 498(2)
or (3) of the Companies Act 2006 in respect of either of these sets
of accounts.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR PGGWCPUPRGMM
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