TIDMSRON
RNS Number : 6290Q
Saffron Energy PLC
13 September 2017
13 September 2017
Saffron Energy Plc
("Saffron" or the "Company")
Interim Financial Statements
Saffron Energy plc (AIM: SRON), the natural gas producer with
interests in northern Italy, is pleased to announce its Interim
Financial Statements for the six months ended 30 June 2017.
A copy of these is also available on the Company's website
https://saffronenergy.co.uk/investors/financial-reports/
About Saffron Energy PLC
Saffron Energy is a natural gas producer with interests in
Northern Italy. Its portfolio includes two gas production fields
(Sillaro and Bezzecca (90%)), and an application for a near-term
gas production field (Sant'Alberto), all near Milan and Bologna.
Saffron Energy commenced trading on the London AIM Market under the
ticker of SRON on 24 February 2017.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For more information, please visit www.saffronenergy.co.uk or
contact the following:
Saffron Energy plc +44 (0) 7791288381
Michael Masterman, CEO info@saffronenergy.co.uk
Grant Thornton UK LLP (Financial +44 (0) 207 383
& Nominated Adviser) 5100
Colin Aaronson
Harrison J Clarke
Turner Pope Investments (TPI)
Ltd (Broker) +44 (0)2036214120
Ben Turner info@turnerpope.com
James Pope
Cassiopeia Services (PR/IR) +44 (0) 7949690338
Stefania Barbaglio Stefania@cassiopeia-ltd.com
CHIEF EXECUTIVE OFFICER'S STATEMENT
Total Production for the first six months of 2017 amounted to
2.6 million standard cubic metres of gas (circa 91 million standard
cubic feet). Production in 2016 for the same period was 2.4 million
standard cubic metres (circa 83 million standard cubic feet).
Production for the period was from the Company's Sillaro and
Bezzecca gas fields. Sillaro which is currently producing from a
single level - CO - was expected to stop production early in the
year, however despite a slight decrease in the daily rate,
production from this level continues strong averaging between 5,000
to 10,000 scm/day. As announced to the market in March, the
development and tie in of the Bezzecca gas field was completed and
commissioned in Q2 on time and on budget with first gas flows on 18
April and full commercial production commencing at a steady rate
from the Level A interval in mid-May 2017. Over the first two weeks
of July, the Company installed a downhole choke at Bezzecca and
production from the field recommenced immediately afterwards from
level, A and S. Production rates in Level A were adjusted in order
to allow for increased aggregate production from both levels.
The Company continues to make good progress in its application
for a full production concession for the gas field Sant'Alberto.
The Company is currently awaiting the granting of an Intesa
(agreement) from the Emilia Romagna regional government, following
which the Ministry of Economic Development in Rome will issue the
production concession. The Company had originally anticipated that
the Intesa and the production concession would have been granted by
the end of the first half of 2017. Saffron now anticipates that
this will have been achieved by Q3 2017. Development of
Sant'Alberto will follow the grant of the production concession and
first gas is now expected in or around Q1 2018.
Finance
In February, the Company successfully listed on the AIM board of
the London Stock Exchange following an oversubscribed GBP2.5m book
build and capital raising.
The net loss of the Company after income tax amounted to EUR916k
for the half-year ended 30 June 2017. The operating results for the
first six months of the year reflect the fact that commercial
production from Bezzecca was only captured in the last two months
of the period and include some additional one-off IPO related
costs. Consequently the half year results presented in this report
are not indicative of the ongoing earnings potential of the
Company.
Health and Safety
The Company places a high importance on its commitment to
Health, Safety and the Environment (HS&E). Saffron ensures that
the various stages of business activities from initial planning to
carrying-out daily operational procedures are designed and
performed with the implemented HS&E safety systems in mind. A
total of 16,058 man- hours worked both on-site and within the
administrative office with no incidents or near misses to report is
testament to the importance and effectiveness the internal HS&E
management systems. Saffron is committed to maintaining
environmental sustainability and health and safety in the workplace
as they are an integral part of our business strategy and corporate
citizenship.
Outlook
During the period, Saffron has reached major milestones with
mechanical completion of the tie-in development and commencement of
commercial production from Bezzecca, whilst progressing the final
stages of approval for its Sant'Alberto field which is intended to
come on stream in the next 12 months. On behalf of the Board, I
would like to thank our hardworking team in Italy and our valued
shareholders for their support during the listing process. We look
forward to prospering with the development work as we head towards
production from Sant'Alberto in 2018 and prepare for the second
phase of production ramp-up which will include a sidetrack well at
Sillaro and a second development well at Bezzecca.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
31 December
30 June 2017 2016
NOTE EUR'000 EUR'000
Non-Current Assets
Inventory 733 -
Other assets 138 -
Deferred tax assets 3 1,995 -
Property, plant & equipment 5 2,294 -
Resource property costs 6 6,077 -
------------- ------------
Total non-current assets 11,237 -
------------- ------------
Current Assets Cash
and cash equivalents 522 60
Trade and other receivables 698 -
------------- ------------
Total current assets 1,220 60
------------- ------------
Total assets 12,457 60
============= ============
Liability and equity
Current Liabilities
Trade and other payables 1,836 -
Provisions 7 52 -
Interest bearing loans 8 393 -
------------- ------------
Total current liabilities 2,281 -
------------- ------------
Non-Current Liabilities
Provisions 7 4,992 -
Total non-current liabilities 4,992 -
------------- ------------
Total Liabilities 7,273 -
------------- ------------
Equity Issued capital
Nominal share capital 181 60
Share premium 9 2,455 -
Merger reserve 9 3,464 -
Accumulated losses 9 (916) -
------------- ------------
Total equity 5,184 60
------------- ------------
Total equity and liabilities 12,457 60
------------- ------------
CONSOLIDATED INCOME STATEMENT AND OTHER COMPREHENSIVE INCOME FOR
THE SIX MONTHSED 30 JUNE 2017
NOTE 30 June
2017
EUR'000
Revenue(**) 560
Operating costs (307)
Depreciation and amortisation
expense (132)
---------
Gross profit 121
Other income 7
Technical & administrative
employee benefits(*) (442)
Depreciation expense (4)
Corporate overheads
(inc. IPO costs) (*) (582)
Exploration costs expensed (4)
---------
Loss from operating
activities (904)
Finance income -
Finance expense (12)
---------
Net finance expense (12)
---------
Loss before income tax
expense (916)
Income tax expense 2 -
---------
Loss for the period (916)
Other comprehensive
income -
Total comprehensive
loss for the period (916)
=========
Loss attributable to:
Owners of the Company (916)
Non-controlling interests -
---------
Loss for the period (916)
=========
Total comprehensive
loss attributable to:
Owners of the Company (916)
Non-controlling interests -
---------
Total comprehensive
loss for the period (916)
=========
Basic and diluted loss
per share (EUR) 4 (0.0068)
*Both these line items include one off costs associated with the
restructuring and lead up to the IPO on 24 February 2017.
**The Bezzecca gas field started steady production in May 2017
and so revenue from this new production field is only for just over
2 months.
No comparative information has been included in the consolidated
income statement and other comprehensive income as trading
commenced in 2017.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2017
Attributable to equity holders of the
Company
Share Share Merger Accumulated
capital Premium Reserve Losses Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at incorporation - - - - -
Contributions by owners 60 - - - 60
---- ------ -------- ------ --------
Balance at 31 December 2016 60 - - - 60
==== ====== ======== ====== ========
Balance at 1 January 2017 60 - - - 60
Total comprehensive loss for
the period:
Loss for the period - - - (916) (916)
Other comprehensive income - - - - -
---- ------ -------- ------ --------
Total comprehensive loss for
the period - - - (916) (916)
---- ------ -------- ------ --------
Transactions with owners recorded
directly in equity:
Contributions by owners 59 2,884 - - 2,943
Share based payments for services
rendered (non-cash) 4 210 - - 214
Share based payments for acquisition
of subsidiary (non-cash) 58 - 9,942 - 10,000
Goodwill written off - - (6,478) - (6,478)
Transaction costs relating to
issue of shares - (639) - - (639)
---- ------ -------- ------ --------
Balance at 30 June 2017 181 2,455 3,464 (916) 5,184
==== ====== ======== ====== ========
.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2017
30 June 31 December
2017 2016
EUR'000 EUR'000
Cash flows from operating
activities
Receipts from customers 441 -
Payments to suppliers and
employees (1,634) -
Interest paid (12) -
Income tax paid
--------- ------------
Net cash used in operating
activities (1,205) -
--------- ------------
Cash flows from investing
activities
Acquisition of cash balances 107 -
Receipts for resource property
costs from joint operations
partners 100 -
Payments for resource property
costs and production plant
and equipment (313) -
--------- ------------
Net cash used in investing
activities (106) -
--------- ------------
Cash flows from financing
activities
Proceeds from issues of shares 2,944 60
Transaction costs relating
to issue of shares (582) -
Proceeds from borrowings 678 -
Repayment of borrowings (1,267) -
Payment of borrowing costs
other than interest -
--------- ------------
Net cash provided by financing
activities 1,773 60
--------- ------------
Net increase in cash and cash
equivalents 462 60
--------- ------------
Cash and cash equivalents
brought forward 60 -
--------- ------------
Cash and cash equivalents
carried forward 522 60
========= ============
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2017
NOTE 2: INCOME TAX EXPENSE
Numerical reconciliation between aggregate tax expense
recognised in the statement of comprehensive income and tax
expenses calculated per the statutory income tax rate
30 June 2017
EUR'000
Loss for the year before tax (916)
Income tax benefit using the Group tax
rate of 24% (220)
Current year losses and temporary differences
for which no deferred tax asset was recognised 220
Changes in temporary differences -
Other non-deductible expenses
-------------
Income tax expense / (benefit) -
=============
Tax benefits have not been recognised in respect of tax losses
and temporary differences for the first six months based on
management's conservative assessment of future taxable profit that
would be available against which the Group can utilise the benefits
therefrom.
NOTE 3: DEFERRED TAX ASSETS
Deferred tax assets have been recognised in respect
of tax losses and temporary differences based on
management assessment that future taxable profit
will be available against which the Group can utilise
the benefits therefrom. Deferred tax assets amounting
to EUR1,994,913 have been recognised in relation
to the Italian subsidiary's available tax losses
and temporary differences.
NOTE 4: LOSS PER SHARE
30 June
2017
Basic loss per share (EUR) (0.0068)
Diluted loss per share (EUR) (0.0068)
The calculation of basic loss per share was based
on the loss attributable to shareholders of EUR916,039
and a weighted average number of ordinary shares
outstanding during the half year of 134,165,967.
NOTE 5: PROPERTY, PLANT & EQUIPMENT
30 June 31 December
2017 2016
EUR'000 EUR'000
Office Furniture & Equipment:
At cost 200 -
Accumulated depreciation (193) -
--------- ------------
7 -
--------- ------------
Gas producing plant and equipment
At cost 8,524
Accumulated depreciation (6,237) -
--------- ------------
2,287 -
--------- ------------
2,294 -
========= ============
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2017
NOTE 5: PROPERTY, PLANT & EQUIPMENT (Continued)
30 June 31 December
2017 2016
EUR'000 EUR'000
Reconciliations:
Reconciliation of the carrying
amounts for each class of
Plant & equipment are set out
below:
Office Furniture & Equipment:
Carrying amount at beginning
of period -
Acquisition of assets 11
Depreciation expense (4) -
--------- ------------
Carrying amount at end of period 7 -
--------- ------------
Gas Producing plant and equipment:
Carrying amount at beginning
of period - -
Acquisition of assets 2,325 -
Additions 21 -
Depreciation expense (60) -
--------- ------------
Carrying amount at end of period 2,286 -
--------- ------------
2,293 -
========= ============
NOTE 6: RESOURCE PROPERTY COSTS
31 December
30 June 2017 2016
EUR'000 EUR'000
Resource Property costs
Exploration Phase 2,554 -
Production Phase 3,523 -
------------- ------------
6,077 -
============= ============
Reconciliation of carrying
amount of resource properties
Exploration Phase
Carrying amount at beginning
of period - -
Acquisition of assets (refer
note 10) 5,003
Exploration expenditure 516 -
Transfer to Production phase (2,965) -
Exploration expenditure written
off - -
------------- ------------
Carrying amount at end of
period 2,554 -
============= ============
Resource property costs in the exploration and
evaluation phase have not yet reached a stage which
permits a reasonable assessment of the existence
of, or otherwise, economically recoverable reserves.
The ultimate recoupment of resource property costs
in the exploration phase is dependent upon the
successful development and exploitation, or alternatively
sale, of the respective areas of interest at an
amount greater than or equal to the carrying value.
During the period, the Group completed the development
of the Bezzecca field. Accumulated costs relating
to this field were transferred to production phase
assets as production commenced in the second quarter
of the year.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2017
NOTE 6: RESOURCE PROPERTY COSTS (Continued)
30 June 31 December
2017 2016
Production Phase EUR'000 EUR'000
Carrying amount at beginning
of period - -
Acquisition of assets (refer
note 10) 599
Additions 1 -
Transfer from exploration 2,965
Change in estimate of rehabilitation
assets - -
Amortisation of producing
assets (42) -
Impairment loss -
-------- ------------
Carrying amount at end of
period 3,523 -
======== ============
NOTE 7: PROVISIONS
30 June 31 December
2017 2016
EUR'000 EUR'000
Current:
Employee leave entitlements 32 -
Other provisions 20 -
-------- ------------
52 -
-------- ------------
Non-Current:
Restoration provision 4,992 -
======== ============
Reconciliation of restoration
provision:
Opening balance 4,962 -
Increase in provision from
unwind of discount rate 30 -
-------- ------------
Closing balance 4,992 -
======== ============
NOTE 8: INTEREST BEARING LIABILITIES
30 June 31 December
2017 2016
EUR'000 EUR'000
Current liabilities
Loans 393 -
--------- --------------------
393 -
========= ====================
Terms and debt repayment schedule:
Terms and conditions of outstanding loans were
as follows:
31 December
30 June 2017 2016
Nominal Year Face Carrying Face Carrying
Interest of value Amount value Amount
Currency rate maturity EUR'000 EUR'000 EUR'000 EUR'000
Unsecured
loans AUD 10% 2018 393 393 - -
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2017
NOTE 9: ISSUED CAPITAL
30 June 30 June
2017 Nominal Share Merger 2017
Number value Premium Reserve Total
000's EUR'000 EUR'000 EUR'000 EUR'000
Issued Capital
Opening balance
- 1 January 50,000 60 - - 60
Shares issued
during the year:
Issued for the
acquisition of
subsidiary 50,000 58 - 9,942 10,000
Goodwill on acquisition
of subsidiary - - - (6,478) (6,478)
Issued for services
rendered 3,720 4 210 - 214
Issued for cash
on subscription
on AIM listing 50,000 59 2,884 - 2,943
Share issue costs - (639) - (639)
------------ --------- --------- --------- ------------
Closing balance
- 30 June 2017 153,720 181 2,455 3,464 6,100
============ ========= ========= ========= ============
31 December 31 December
2016 Nominal Share Merger 2016
Number value Premium Reserve Total
000's EUR'000 EUR'000 EUR'000 EUR'000
Opening balance
1 share issued
on incorporation - - - - -
Issued for cash
(i) 50,000 60 - - 60
Closing balance
- 31 December
2016 50,000 60 - - 60
============ ========= ========= ========= ============
(i) 49,999 Shares were issued for cash on 10 November 2016 and
on 9 December 2016, the total shares on issue were subdivided into
50,000,000 shares.
All ordinary shares are fully paid and carry one vote per share
and the right to dividends. In the event of winding up the Company,
ordinary shareholders rank after creditors. Ordinary shares have a
par value of GBP0.001 per share.
No dividends were paid or declared during the current
period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GCGDCCDBBGRX
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