Half Year Results 2021
Providence Resources
P.l.c.2021 Half Year Results
Dublin and London – September
29th, 2021 - Providence Resources
P.l.c. (PVR LN, PRP ID), the Irish-based Energy Company, today
announces its unaudited interim results for the half year ended
June 30, 2021.
Business Review
James Menton was appointed as Senior Independent
Non-Executive Director on 14 May 2021 as an initial step in adding
to the quality and range of board competencies considered essential
for shaping the future Providence Resources Plc business
strategy.
Pat Plunkett stepped down from the Board
following the Annual General Meeting (AGM) on 22 July 2021 and
James Menton assumed the role of Chair following the AGM.
In line with the policy of strengthening the board, two new
board members were identified and recruited to join Non-Executive
Director Andrew MacKay who was appointed in July 2020. On 23 July
2021 Peter Newman was appointed as Senior Independent Non-Executive
Director and Ann-Marie O’Sullivan was appointed as a Non-Executive
Director.
- Strategic
review of development potential
of
Barryroe
A full strategic review of the development
potential of the Barryroe field has been initiated by the new Board
of Providence Resources Plc in order to prepare a robust case for
the development of the field to optimise value for shareholders,
while recognising the need for Irish energy security through the
energy transition. Following termination of the farmout to SpotOn
Energy, the strategic review, which will include independently
evaluated assessments of the field’s development scenarios and
their potential, is considered essential by the Board.
The results of this strategic review,
encompassing both Providence’s Technical Strategy and it’s related
Financial Strategy, will be completed in Q4 2021 and will determine
the strategic plan for the development of the Barryroe Field.
- Barryroe, Celtic Sea
(SEL 1/11) - Subject to Lease Undertaking application
The Group holds an 80% working interest in and
is operator of SEL 1/11 which contains the Barryroe oil
accumulation. The Barryroe Standard Exploration Licence period
continued up until the 13 July 2021. Prior to its expiry, and
having met all the conditions attaching to that Licence, the Group
applied for the follow-on permit, being a Lease Undertaking, which
is subject to government approval. Initial documentation for an
application for a Lease Undertaking was submitted to the regulatory
authority in April 2021 and was completed in July 2021, prior to
the expiry of SEL 1/11 in July 2021. The regulatory authority
requested additional information in support of the application,
which was provided. The Lease Undertaking application remains under
consideration by the regulatory authority.
The Directors note that the Irish
Government has stated that existing authorisations
can continue to apply to progress through the licensing
stages. This position is consistent with the recent
legislative amendments made to the Petroleum and Other Minerals
Development Act 1960 through the Climate Action and Low Carbon
Development (Amendment) Act 2021.
In February 2021, the farmout agreement with
SpotOn Energy Limited was extended to provide SpotOn with
additional time to finalise project development funding. In April
2021, following SpotOn’s failure to meet key financing conditions,
the agreement was terminated.
Providence immediately reassumed direct
responsibility for progressing the development and recruited an
experienced Oil & Gas team to refresh and optimise a phased
development plan for the Barryroe field, with Providence as
operator. This new team’s technical evaluation is nearing
completion and includes independent contributions from specialist
sub-surface, facilities, and drilling consultants. The aim is to
prepare a phased project development plan which is operationally
and economically robust. The results of this work will be
incorporated into the full strategic review of the development
potential of the Barryroe field to be completed in Q4 2021.
In February 2021 Providence Resources Plc
subsidiary (Exola DAC) received consent to carry out a site survey.
The survey is scheduled for October 2021.
Dragon, St. George’s Channel (SEL 1/07)Under
discussion with the regulatory authority.
Hook Head, North Celtic Sea (SEL 2/07)Subject
of a Lease Undertaking application.
Helvick/Dunmore Celtic Sea (Lease
Undertaking)
Subject to work programme finalisation.
Extension is under consideration by the regulatory authority.
Avalon – Southern Porcupine (FEL 2/19)The
relinquishment documentation is in process with the regulatory
authority.
Dunquin – Southern Porcupine (FEL 3/04)The
relinquishment documentation is in process with the regulatory
authority.
Operating loss for the period was €1.065m versus
€1.063m in the prior period.
Profit before tax for the period was €1.628m,
due to a non-cash accounting gain in relation to the warrants
revaluation (€3.155m net revaluation gain) which exceeded operating
and administrative costs incurred in the period. The loss for the
equivalent period was €9.247m (€7.764m net revaluation loss).
Basic/diluted profit per share of 0.18 cents and
0.14 cents versus loss in prior year of 1.30 cents for both basic
and diluted.
As at 30 June 2021, total cash and cash
equivalents was €3.645m versus €2.269m at 30 June 2020.
The Group had no debt as of 30 June 2021. (2020:
Nil).
During the period 86,061,529 warrants at £0.03 were exercised
raising c. €2.9m. The remainder of the warrants expired on the 6
May 2021. The warrants were issued as part of the May 2020
fund-raising. 177,973,004 warrants with an exercise price of £0.09
remain exercisable until 6 May 2022.
The total issued and voting share capital as of
30 June 2021 was 974,864,403 ordinary shares of €0.001 each.
4,500,000 share options were granted to both
James Menton and Andrew Mackay on 24 May 2021.
4,500,000 share options were granted to both
Peter Newman and Ann-Marie O’Sullivan on 18 August 2021.
Providence Resources Plc
CEO, Alan Linn
commented on the importance of the Barryroe
development:
"It is widely recognised that gas will be an
essential energy supply for decades to come, in order to underpin
and complement the growth of renewable energy sources. With the
decline of the Corrib Gas Field within a five-year period, we are
focused on progressing our strategic plan for Barryroe as a matter
of urgency. The successful development of Barryroe would secure an
indigenous oil and gas supply for Ireland, without which 100% of
Ireland's gas will be imported by 2031. At a time when much of
Europe is experiencing difficulties with energy supply, a coherent
transition strategy is critical to avoid the prospect of energy
blackouts becoming a common occurrence.”
ABOUT PROVIDENCE RESOURCESProvidence Resources
Plc is an Irish based Energy Company with oil and gas assets
located offshore Ireland. Providence's shares are quoted on
the AIM in London and Euronext Growth Market in Dublin. Further
information on Providence can be found
on www.providenceresources.com
INVESTOR ENQUIRIES |
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Providence Resources
P.l.c. |
Tel: +353 1 219 4074 |
Alan S LinnChief Executive
Officer Investor RelationsJob Langbroek |
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J&E
Davy |
Tel: +353 1 679 6363 |
Anthony Farrell |
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MEDIA
ENQUIRIES |
Tel: +353 87 6909735 |
Murray
ConsultantsJoe Heron |
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PROVIDENCE RESOURCES P.l.c.Condensed
consolidated income statementFor the 6 months ended 30 June
2021
|
Notes |
6 months ended 30 June
2021Unaudited€’000 |
6 months ended 30 June
2020Unaudited€’000
|
Year ended 31 December
2020Audited€’000 |
Continuing operations |
|
|
|
|
Administration expenses |
2 |
(1,065) |
(1,063) |
(2,163) |
Pre-licence expenditure |
|
- |
- |
(5) |
Impairment of exploration and evaluation assets |
5,9 |
- |
- |
(272) |
Operating loss |
|
(1,065) |
(1,063) |
(2,440) |
|
|
|
|
|
Finance income |
4 |
3,765 |
1 |
361 |
Finance expense |
3 |
(1,072) |
(8,185) |
(8,279) |
|
|
|
|
|
Profit/(loss)
before income tax |
|
1,628 |
(9,247) |
(10,358) |
Income tax expense |
|
- |
- |
- |
Profit/(loss)
for the period |
|
1,628 |
(9,247) |
(10,358) |
|
|
|
|
|
Profit/(loss)
per share (cent) – continuing
operations |
|
|
|
|
Basic profit/(loss) per share |
11 |
0.18 |
(1.30) |
(1.31) |
Diluted profit/(loss) per share |
11 |
0.14 |
(1.30) |
(1.31) |
The total recognised profit/(loss) for the period is entirely
attributable to equity holders of the Company.The accompanying
notes are an integral part of these condensed consolidated
financial statements.
PROVIDENCE RESOURCES P.l.c.Consolidated
statement of comprehensive incomeFor the 6 months ended 30 June
2021
|
Notes |
6 months ended 30 June
2021Unaudited€’000 |
6 months ended 30 June
2020Unaudited€’000 |
Year ended 31 December
2020Audited€’000 |
Profit/(loss)
for the financial period |
|
1,628 |
(9,247) |
(10,358) |
OCI Items that may be reclassified into profit or loss |
|
|
|
|
|
|
|
|
|
Foreign exchange translation differences |
|
1,930 |
206 |
(5,453) |
|
|
|
|
|
Total income recognised in other comprehensive income from
continuing operations |
|
1,930 |
206 |
(5,453) |
|
|
|
|
|
Total comprehensive
income/(expense)
for the period |
|
3,558 |
(9,041) |
(15,811) |
The total comprehensive income/(expense) recognised for the
period is entirely attributable to equity holders of the
Company.The accompanying notes are an integral part of these
condensed consolidated financial statements.
PROVIDENCE RESOURCES P.l.c.Consolidated
statement of financial positionAs at 30 June 2021
|
Notes |
30 June
2021Unaudited€’000 |
30 June
2020Unaudited€’000 |
31 December
2020Audited€’000 |
Assets |
|
|
|
|
Exploration and evaluation assets |
5 |
62,723 |
65,940 |
60,425 |
Property, plant and equipment |
|
3 |
24 |
13 |
Total non-current assets |
|
62,726 |
65,964 |
60,438 |
|
|
|
|
|
Trade and other receivables |
6 |
154 |
240 |
223 |
Cash and cash equivalents |
|
3,645 |
2,269 |
2,110 |
Total current assets |
|
3,799 |
2,509 |
2,333 |
|
|
|
|
|
Total assets |
|
66,525 |
68,473 |
62,771 |
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
7 |
71,829 |
71,696 |
71,743 |
Share premium |
7 |
260,271 |
253,239 |
256,773 |
Undenominated capital |
|
623 |
623 |
623 |
Foreign currency translation reserve |
|
6,564 |
10,293 |
4,634 |
Share based payment reserve |
|
962 |
858 |
806 |
Retained deficit |
|
(283,561) |
(284,361) |
(285,189) |
Total equity attributable to equity holders of the
company |
|
56,688 |
52,348 |
49,390 |
|
|
|
|
|
Liabilities |
|
|
|
|
Decommissioning provision |
9 |
6,346 |
6,014 |
5,853 |
Warrant liability |
10 |
- |
4,356 |
3,555 |
Lease liability |
|
- |
- |
- |
Total non-current liabilities |
|
6,346 |
10,370 |
9,408 |
|
|
|
|
|
Warrant liability |
10 |
2,948 |
4,561 |
3,158 |
Trade and other payables |
8 |
543 |
1,194 |
815 |
Total current liabilities |
|
3,491 |
5,755 |
3,973 |
|
|
|
|
|
Total liabilities |
|
9,837 |
16,125 |
13,381 |
Total equity and liabilities |
|
66,525 |
68,473 |
62,771 |
The accompanying notes are an integral part of these condensed
consolidated financial statements.
PROVIDENCE RESOURCES P.l.c.Consolidated
statement of changes in EquityFor the 6 months ended 30 June
2021
|
Share Capital €’000 |
Undenominated capital €’000 |
Share Premium €’000 |
Foreign Currency Translation Reserve €’000 |
Share Based Payment Reserve €’000 |
Retained Deficit €’000 |
Total €’000 |
At 1 January
2021 |
71,743 |
623 |
256,773 |
4,634 |
806 |
(285,189) |
49,390 |
Profit for financial period |
- |
- |
- |
- |
- |
1,628 |
1,628 |
Currency translation |
- |
- |
- |
1,930 |
- |
- |
1,930 |
Total comprehensive income |
- |
- |
- |
1,930 |
- |
1,628 |
3,558 |
Transactions with owners, recorded directly in
equity |
|
|
|
|
|
|
|
Shares issued in period |
86 |
- |
3,498 |
- |
- |
- |
3,584 |
Share based payments in period |
- |
- |
- |
- |
156 |
- |
156 |
At 30 June
2021 |
71,829 |
623 |
260,271 |
6,564 |
962 |
(283,561) |
56,688 |
At 1 January
2020 |
71,512 |
623 |
251,300 |
10,087 |
642 |
(274,898) |
59,266 |
Loss for financial period |
- |
- |
- |
- |
- |
(9,247) |
(9,247) |
Currency translation |
- |
- |
- |
206 |
- |
- |
206 |
Total comprehensive income |
- |
- |
- |
206 |
- |
(9,247) |
(9,041) |
Transactions with owners, recorded directly in
equity |
|
|
|
|
|
|
|
Shares issues in period |
184 |
- |
1,939 |
- |
- |
(216) |
1,907 |
Share based payments in period |
- |
- |
- |
- |
216 |
- |
216 |
At 30 June
2020 |
71,696 |
623 |
253,239 |
10,293 |
858 |
(284,361) |
52,348 |
At 1 January
2020 |
71,512 |
623 |
251,300 |
10,087 |
642 |
(274,898) |
59,266 |
Loss for financial year |
- |
- |
- |
- |
- |
(10,358) |
(10,358) |
Currency translation |
- |
- |
- |
(5,453) |
- |
- |
(5,453) |
Total comprehensive income |
- |
- |
- |
(5,453) |
- |
(10,358) |
(15,811) |
Transactions with owners, recorded directly in
equity |
|
|
|
|
|
|
|
Share based payment expense |
- |
- |
- |
- |
448 |
- |
448 |
Share options lapsed in year |
- |
- |
- |
- |
(284) |
284 |
- |
Shares issued in year |
231 |
- |
5,473 |
- |
- |
(217) |
5,487 |
Transactions with owners, recorded directly in
equity |
231 |
- |
5,473 |
- |
164 |
67 |
5,935 |
At 31 December
2020 |
71,743 |
623 |
256,773 |
4,634 |
806 |
(285,189) |
49,390 |
PROVIDENCE RESOURCES P.l.c.Consolidated
statement of cash
flows For the 6
months ended 30 June 2021
|
6 months ended 30 June
2021 |
6 months ended 30 June 2020 |
Year ended 31 December 2020 |
|
Unaudited |
Unaudited |
Audited |
|
€’000 |
€’000 |
€’000 |
Cash flows from operating activities |
|
|
|
|
|
|
|
Profit/(loss) before income tax for the period |
1,628 |
(9,247) |
(10,358) |
Adjustments for: |
|
|
|
Depletion and depreciation |
3 |
14 |
24 |
Impairment of exploration and evaluation assets |
- |
- |
272 |
Finance income |
(3,765) |
(1) |
(361) |
Finance expense |
1,072 |
8,185 |
8,279 |
Equity settled share based payment charge |
156 |
216 |
448 |
Foreign exchange |
(19) |
34 |
21 |
Change in trade and other receivables |
69 |
158 |
175 |
Change in trade and other payables |
(272) |
(321) |
(700) |
|
|
|
|
Net cash outflow from
operating activities |
(1,128) |
(962) |
(2,200) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Interest received |
- |
1 |
1 |
Acquisition of exploration and evaluation assets |
(331) |
(390) |
(845) |
Acquisition of property, plant and equipment |
(2) |
- |
(1) |
|
|
|
|
Net cash used in
investing activities |
(333) |
(389) |
(845) |
|
|
|
|
Cashflows from financing activities |
|
|
|
Proceeds from issue of security instruments (see note 7) |
2,974 |
3,277 |
4,836 |
Security instrument Issue costs |
- |
(350) |
(349) |
Net cash from financing activities |
2,974 |
2,927 |
4,487 |
|
|
|
|
Net increase in cash and
cash equivalents |
1,513 |
1,576 |
1,442 |
|
|
|
|
Cash and cash equivalents at beginning
of period |
2,110 |
710 |
710 |
Effect of exchange rate fluctuations on cash and cash
equivalents |
22 |
(17) |
(42) |
|
|
|
|
Cash and cash equivalents at end of
period |
3,645 |
2,269 |
2,110 |
The accompanying notes are an integral part of these condensed
consolidated financial statements.
PROVIDENCE RESOURCES P.l.c.Note
1 – Accounting Policies
General Information
Providence Resources P.l.c. (“the Company”) is a
Company incorporated and domiciled in the Republic of Ireland. The
registration number of the Company is 268662 and the address of the
registered office is Paramount Court, Corrig Road, Sandyford
Business Park, Dublin 18, D18 R9C7. The unaudited consolidated
interim financial statements of the Company for the six months
ended 30 June 2021 (the "Interim Financial Statements") include the
Company and its subsidiaries (together referred to as the
"Group"). The Interim Financial Statements were authorised
for issue by the Directors on 30 September 2021.
Basis of accounting
These interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting and should be
read in conjunction with the Group's last annual consolidated
financial statements as at and for the year ended 31 December 2020
('last annual financial statements'). They do not include all of
the information required for a complete set of IFRS financial
statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and
performance since the last annual financial statements.
The 30 June 2021 figures and the 30 June 2020 comparative
figures do not constitute statutory financial statements of the
Group within the meaning of the Companies Act, 2014. The
consolidated financial statements of the Group for the year ended
31 December 2020, together with the independent auditor’s report
thereon, were filed with the Irish Registrar of Companies following
the Company’s Annual General Meeting and are also available on the
Company’s Website. The auditor’s report on those financial
statements was unqualified and contains a “material uncertainty
related to going concern” paragraph.
The condensed set of financial statements included in this
half-yearly financial report has been prepared on a going concern
basis as the Directors consider that the Group has adequate
resources to continue in operational existence for the foreseeable
future (See below for further details on the Directors assessment
of going concern).
In preparing these interim financial statements, management has
made judgements and estimates that affect the application of
accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from
these estimates. The significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those described in the last
annual report.
The Interim Financial Statements are presented
in Euro, rounded to the nearest thousand, which is the functional
currency of the Company and also the presentation currency for the
Group’s financial reporting.
PROVIDENCE RESOURCES P.l.c.Accounting
Policies (continued)
Significant accounting policies (continued)
The significant accounting policies applied in these interim
financial statements are the same as those applied by the Group in
its consolidated financial statements as at and for the year ending
31 December 2020.
Amendments to standards and interpretations which are effective
for the Group from 1 January 2021 do not have a material effect on
the results or financial posting in the interim financial
statements as at and for the period ending 30 June 2021.
Going
concern
The Group had net assets of €56.7m, including
cash on hand of €3.6m as at 30 June 2021. It recognised a profit
after taxation of €1.6m for the six month period as a result of a
gain arising from the revaluation of warrants issued in 2020. The
Directors have carefully considered the financial position of the
Group and, in that context, have prepared the interim financial
statements on a going concern basis.
The company raised approximately €2.9 million in
equity in the period January to June 2021, through the conversion
of 86,061,529 warrants of £0.03 each, which were issued as part of
the May 2020 fundraising. The total conversion rate for these £0.03
warrants was 74.9%. There are 177,973,004 £0.09 further warrants in
issue which expire on 6 May 2022.
The Group’s principal interest is the
development of the Barryroe oil and gas Field. The Barryroe
Standard Exploration Licence period continued up until the 13 July
2021. Prior to its expiry, having met all the conditions attaching
to that Licence, the Group applied for the follow-on permit, being
a Lease Undertaking, which is subject to government approval. The
approval process is ongoing and the Directors anticipate that the
Lease Undertaking will be granted. The Directors note that the
Irish Government has stated that existing authorisations
can continue to apply to progress through the licensing
stages. This position is consistent with the recent
legislative amendments made to the Petroleum and Other Minerals
Development Act 1960 through the Climate Action and Low Carbon
Development (Amendment) Act 2021.
The Directors have carefully considered the
financial position of the Group and have prepared cashflow
forecasts for the next 12 months, considering both current and
future expenditure commitments and the options available to fund
such commitments, including equity funding and other financing
options in the twelve month period from the date of approval of
these interim financial statements. In making their cashflow
forecasts, including the primary underlying assumptions, being the
granting of the Barryroe Lease Undertaking on terms and conditions
that are acceptable along with the completion of an appropriate
fund raising in the period for the proposed Barryroe work
programme, the Directors believe that the Group will have
sufficient funds available over the next 12 months to meet all its
commitments as they fall due.
The Directors have considered the matters set
out above and determined that the assumptions of the grant of the
Barryroe Lease Undertaking and the related raising of additional
funding in the next 12 months represents a material uncertainty
that may cast significant doubt upon the Group’s ability to
continue as a going concern, and the Directors note that the Group
may, as a consequence, be unable to continue realising its assets
and discharge its liabilities in the normal course of business.
PROVIDENCE RESOURCES P.l.c.
Going
concern
(continued)
The Directors, after making enquiries and
considering the uncertainties described above, have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeablefuture. The Directors
anticipate that an appropriate financing exercise will be
successfully completed and note that the Group has continued to
have the strong support of its shareholders.
For these reasons, the Directors have adopted
the going concern basis in preparing the interim financial
statements which do not include any adjustments that would be
necessary if this basis were subsequently adjudged to be
inappropriate.
Note 2 –
Administration Expenses
|
6 months ended 30 June
2021 |
6 months ended 30 June
2020 |
Year ended 31 December 2020 |
|
Unaudited |
Unaudited |
Audited |
|
€’000 |
€’000 |
€’000 |
|
|
|
|
Corporate, exploration and development expenses |
1,084 |
1,035 |
2,142 |
Foreign exchange (gains)/losses net |
(19) |
28 |
21 |
|
|
|
|
Total administration expenses for the period |
1,065 |
1,063 |
2,163 |
|
|
|
|
Capitalised in exploration and evaluation assets |
- |
- |
- |
|
|
|
|
Total charged to the income statement |
1,065 |
1,063 |
2,163 |
Note 3 – Finance
Expense
|
6 months ended 30 June
2021 |
6 months ended 30 June
2020 |
Year ended 31 December 2020 |
|
Unaudited |
Unaudited |
Audited |
|
€’000 |
€’000 |
€’000 |
|
|
|
|
Unwinding of discount on decommissioning provision (note 8) |
302 |
287 |
565 |
Foreign exchange on decommissioning provision |
159 |
- |
- |
Interest on right to use asset |
1 |
1 |
1 |
Issued costs associated with the warrants |
- |
133 |
132 |
Movement in fair value of warrants (note 10)* |
610 |
7,764 |
7,581 |
|
|
|
|
Total finance expense recognised in income
statement |
1,072 |
8,185 |
8,279 |
|
|
|
|
*The €0.6m finance expense arises on the £0.03 warrants
instruments exercised during the period from 1 January 2021 to 5
May 2021. The £0.6m is a non-cash items and reflects the difference
between the fair value of the instrument exercised and the price
paid by the warrant holder to acquire the instrument.
PROVIDENCE RESOURCES P.l.c.Note 4 –
Finance Income
|
6 months ended 30 June 2021 |
6 months ended 30 June 2020 |
Year ended 31 December 2020 |
|
Unaudited |
Unaudited |
Audited |
|
€’000 |
€’000 |
€’000 |
Bank deposit interest income |
- |
1 |
1 |
Movement in fair value of warrants (note 10)* |
3,765 |
- |
- |
Foreign exchange on decommissioning provision (note 9) |
- |
- |
360 |
Total finance expense recognised in income
statement |
3,765 |
1 |
361 |
*The €3.7m of finance income is a non-cash item and relates to a
fair value gain on the Group’s warrants instruments. €3.1m of this
gain relates to the release of the unexercised £0.03 warrants which
expired on 5 May 2021, the balance of €0.6m reflects the movement
in the assumptions underpinning the £0.09 warrant valuations.
Note 5 – Exploration
and evaluation assets
|
€’000 |
Cost and book value |
|
|
|
At 1 January 2020 |
65,377 |
Additions |
390 |
Foreign exchange translation |
173 |
At 30 June 2020 |
65,940 |
|
|
At 1 January 2020 |
65,377 |
Additions |
902 |
Cash calls received in year |
(57) |
Impairment charge |
(272) |
Foreign exchange translation |
(5,525) |
At 31 December 2020 |
60,425 |
|
|
At 1 January 2021 |
60,425 |
Additions |
331 |
Foreign exchange translation |
1,967 |
At 30 June
2021 |
62,723 |
The exploration and evaluation asset balance as at 30 June 2021
relates to the Group’s Barryroe interest.
Note 6 – Trade and other receivables
|
30 June 2021 |
30 June 2020 |
31 December 2020 |
|
Unaudited |
Unaudited |
Audited |
|
€’000 |
€’000 |
€’000 |
VAT recoverable |
22 |
46 |
28 |
Prepayments |
98 |
155 |
162 |
Amounts due from joint operation partner |
34 |
39 |
33 |
Total |
154 |
240 |
223 |
PROVIDENCE RESOURCES
P.l.c.Note 7 –
Share Capital and Share Premium
|
|
|
|
|
|
Number |
|
Authorised: |
|
‘000 |
€’000 |
At 1 January 2021 |
|
|
|
Deferred shares of €0.011 each |
|
9,944,066 |
109,385 |
Ordinary shares of €0.001 each |
|
986,847 |
987 |
|
|
|
|
At 30 June 2021 |
|
|
|
Deferred shares of €0.011 each |
|
9,944,066 |
109,385 |
Ordinary shares of €0.001 each |
|
1,800,000 |
1,800 |
|
|
|
|
|
|
|
|
|
Number |
Share Capital |
Share Premium |
Issued: |
‘000 |
€’000 |
€’000 |
|
|
|
|
Deferred shares of €0.011 each |
|
|
|
At 1 January 2020 |
6,441,373 |
70,855 |
5,691 |
At 31 December 2020 and
30 June 2021 |
6,441,373 |
70,855 |
5,691 |
|
|
|
|
Ordinary share of €0.001
each |
|
|
|
At 1 January 2020 |
657,425 |
657 |
245,609 |
|
|
|
|
Shares issued in period |
184,089 |
184 |
1,939 |
At 30 June 2020 |
841,514 |
841 |
247,548 |
Warrants exercised in year |
47,289 |
47 |
3,534 |
At 31 December 2020 (Ordinary Shares of
€0.001) |
888,803 |
888 |
251,082 |
Warrants exercised in period |
86,062 |
86 |
3,498 |
At 30 June 2021 |
974,865 |
974 |
254,580 |
At 30 June 2021 (Total deferred and Ordinary
shares) |
7,416,238 |
71,829 |
260,271 |
On 5 May 2020, the Company issued 177,973,004 Ordinary Shares as
part of a placing and subscription agreement which raised c. €3.1m
from security instruments before expenses. Each of these security
instruments comprised of one Ordinary Share of €0.001, one £0.03
warrant and one £0.09 warrant.
On issuance, a fair value of €1.9m was attributed to the
Ordinary Shares (share capital / share premium outlined above) and
€1.2m to the Warrant instruments based on the effective share price
at that date. In line with the Group’s accounting policies these
Warrants are presented as financial liabilities (note 10).
The holder of each warrant can exercise its rights under the
instrument which allows that holder to convert the warrant into one
ordinary share, with a par amount of €0.001, by payment of the
exercise price of £0.03 or £0.09, as applicable. The warrants are
non-transferrable.
During the period from January 2021 to June 2021, 86,061,529
£0.03 warrants were converted in Ordinary Shares raising an
additional €2.9m for the company. The £0.03 warrants expired on the
6 May 2021. The £0.03 warrants were issued as part of the fund
raising in 2020.PROVIDENCE RESOURCES
P.l.c.Note 8 –
Trade and other payables
|
30 June
2021 |
30 June 2020 |
31 December 2020 |
|
Unaudited |
Unaudited |
Audited |
|
€’000 |
€’000 |
€’000 |
|
|
|
|
Accruals |
379 |
487 |
361 |
Other payables |
164 |
690 |
445 |
Lease liability |
- |
17 |
9 |
|
|
|
|
Total |
543 |
1,194 |
815 |
|
|
|
|
Note 9 –
Decommissioning provision
|
30 June
2021 |
30 June 2020 |
31 December 2020 |
|
Unaudited |
Unaudited |
Audited |
|
€’000 |
€’000 |
€’000 |
|
|
|
|
At beginning of year |
5,853 |
5,733 |
5,733 |
Unwinding of discount |
302 |
287 |
565 |
Foreign exchange loss/(gain) |
159 |
- |
(360) |
Translation adjustment |
32 |
(6) |
(85) |
|
|
|
|
Total |
6,346 |
6,014 |
5,853 |
|
|
|
|
The provision for decommissioning is reviewed annually. The
provision has been calculated assuming industry established
oilfield decommissioning techniques and technology at current
prices and is discounted at 10% per annum, reflecting the
associated risk profile.
PROVIDENCE RESOURCES
P.l.c.Note 10 -
Warrants
On 5 May 2020, the Company raised c. €3.1m by the issue of
security instruments with each security instrument comprising one
ordinary share, with a par amount of €0.001, one £0.03 warrant
(expires in May 2021) and one £0.09 warrant (expires in May 2022).
The fair value of the warrants was calculated using Black Scholes
model. The following key input assumptions were applied to the
initial valuation on issuance of these instruments:
|
£0.03 Warrants |
£0.09 Warrants |
Number of warrants |
177,973,004 |
177,973,004 |
Volatility |
148% |
148% |
Time period |
1 Year |
2 Years |
Dividend yield |
0% |
0% |
Risk free interest rate |
(0.01%) |
(0.01%) |
Exercise price |
£0.03 |
£0.09 |
Placing effective Share price |
0.01068 |
0.01068 |
Initial value of security |
0.00299 |
0.00349 |
Fair value |
€531,444 |
€621,982 |
The c. €3.1m raised before expenses, from previous and new
shareholder investors, for the security instruments in May 2020 was
considered the transaction price fair value. The split of this fair
value on issuance of these security instruments, based on a placing
effective share price of €0.01068, was €0.531m for the £0.03
Warrants, €0.622m for the £0.09 Warrants and €1.901m for the
Ordinary Shares (split between share capital and share premium
account (note 7)).
On 30 June 2020, the warrants were fair valued using appropriate
inputs including the closing share price on that day of €0.0448.
The fair value movement being the difference between initial
valuation and 30 June 2020 valuation in the amount of €7.764m going
through the finance expense line in the income statement.
|
£0.03 Warrants |
£0.09
Warrants |
Number of warrants |
177,973,004 |
177,973,004 |
Volatility |
148% |
148% |
Time period |
.85 Year |
1.85 Years |
Dividend yield |
0% |
0% |
Risk free interest rate |
(0.01%) |
(0.01%) |
Exercise price |
£0.03 |
£0.09 |
Closing share price 30 June |
€0.0448 |
€0.0448 |
Fair value as at 30 June 2020 |
€4,560,940 |
€4,356,476 |
During 2020, 47,288,814 of the £0.03 warrants were exercised.
There were a number of warrants transactions exercised in each of
the months. The key assumptions used in the calculation of their
fair value at the exercise date are included in the table below.
The weighted average closing price was used to reflect the number
of transactions in each month.
PROVIDENCE RESOURCES
P.l.c.Note 10 –
Warrants (continued)
|
September 20 |
October 20 |
December 20 |
Number of warrants |
24,648,335 |
10,966,667 |
11,673,812 |
Volatility |
125% |
125% |
125% |
Time period |
0.58 Year |
0.50 Year |
0.33 Year |
Dividend yield |
0% |
0% |
0% |
Risk free interest rate |
(0.6%) |
(0.6%) |
(0.6%) |
Exercise price |
£0.03 |
£0.03 |
£0.03 |
Weighted average closing share price |
€0.07 |
€0.08 |
€0.06 |
Fair value |
€1,138,828 |
€557,901 |
€324,687 |
|
|
|
|
The fair value of the warrants exercised during the year 2020 is
recognised as a finance expense of €2.02m in the income statement
(see note 3) with a corresponding increase in share premium.
On 31 December 2020, the warrants were fair valued using
appropriate inputs including the closing share price on that day of
€0.055. The period of 18 months was used for the volatility
calculation for the £0.09 warrants which would expire on 6 May 2022
and the £0.03 warrants which expire on 6 May 2021. The 4-month
period for the £0.03 warrants was too short and would distort the
volatility calculation as it is key component when calculating the
fair value using Black Scholes. The fair value movement being the
difference between the initial valuation and 31 December 2020
valuation in the amount of €5.56m is recorded as a finance expense
in the income statement.
|
£0.03 Warrants |
£0.09 Warrants |
Number of warrants |
130,684,190 |
177,973,004 |
Volatility |
125% |
125% |
Time period |
0.33 Year |
1.33 Year |
Dividend yield |
0% |
0% |
Risk free interest rate |
(0.06%) |
(0.06%) |
Exercise price |
£0.03 |
£0.09 |
Closing share price 31 December 2020 |
€0.055 |
€0.055 |
Fair value as at 31 December 2020 |
€3,157,748 |
€3,555,240 |
|
|
|
During 2021, there were 86,061,529 £0.03 warrants exercised
before they expired on the 6 May 2021.
|
January 21 |
February 21 |
March 21 |
April 21 |
May 21 |
Number of warrants |
287,372 |
1,666,666 |
1,000,000 |
65,975,822 |
17,131,669 |
Volatility |
135% |
135% |
135% |
206% |
208% |
Time period |
0.30 Year |
0.18 Year |
0.10 Year |
0.016 Year |
0.003 Year |
Dividend yield |
0% |
0% |
0% |
0% |
0% |
Risk free interest rate |
(0.61%) |
(0.61%) |
(0.61%) |
(0.61%) |
(0.61%) |
Exercise price |
€0.0337 |
€0.0342 |
€0.035 |
€0.035 |
€0.035 |
Weighted average closing share price |
€0.075 |
€0.075 |
€0.054 |
€0.0392 |
€0.038 |
Fair value |
€12,685 |
€71,219 |
€23,419 |
€439,557 |
€62,804 |
The fair value of the warrants exercised during the period to
June 2021 is recognised as a finance expense of €0.61m in the
income statement (see note 3) with a corresponding increase in
share premium.
PROVIDENCE RESOURCES
P.l.c.Note 10 –
Warrants (continued)
At 30 June 2021, the £0.09 warrants were fair valued. The
assumptions are shown in the table below.
|
£0.09 Warrants |
Number of warrants |
177,973,004 |
Volatility |
176% |
Time period |
0.83 Year |
Dividend yield |
0% |
Risk free interest rate |
(0.61%) |
Exercise price |
£0.09 |
Closing share price 30 June 2021 |
€0.043 |
Fair value as at 30 June 2021 |
€2,948,469 |
The table below shows the fair value movements.
|
Number of Warrants |
£0.03 Warrants€’000 |
Number of Warrants |
£0.09 Warrants€’000 |
Total €’000 |
Initial Valuation |
177,973,004 |
€531 |
177,973,004 |
€622 |
€1,153 |
Fair value as at 30 June 2020 |
177,973,004 |
€4,561 |
177,973,004 |
€4,356 |
€8,917 |
Total Fair value movement recognised in the income
statement at 30 June 2020 (see note
3) |
|
€4,030 |
|
€3,734 |
€7,764 |
September 20 exercised |
24,648,335 |
€1,139 |
- |
- |
€1,139 |
October 20 exercised |
10,966,667 |
€558 |
- |
- |
€558 |
December 20 exercised |
11,673,812 |
€324 |
- |
- |
€324 |
Exercised fair value |
47,288,814 |
€2,021 |
- |
- |
€2,021 |
Fair value as at 31 December 2020 |
130,684,190 |
€3,158 |
177,973,004 |
€3,555 |
€6,713 |
Fair value 2020 |
|
€5,179 |
|
€3,555 |
€8,734 |
Total fair value movement recognised in the income
statement for year 2020 (see note 3) |
|
€4,648 |
|
€2,933 |
€7,581 |
January 21 exercised |
287,372 |
€13 |
- |
- |
€13 |
February 21 exercised |
1,666,666 |
€71 |
- |
- |
€71 |
March 21 exercised |
1,000,000 |
€23 |
- |
- |
€23 |
April 21 exercised |
65,975,822 |
€440 |
- |
- |
€440 |
May 21 exercised |
17,131,669 |
€63 |
- |
- |
€63 |
Exercised fair value movement recognised
in the income statement to 30 June 2021 (see note
3) |
86,061,529 |
€610 |
- |
- |
€610 |
Fair value as at 30 June 2021 |
|
- |
177,973,004 |
€2,948 |
€2,948 |
Total fair value movement recognised in the income
statement for the period to 30 June 2021 (see note 4) |
|
(€3,158) |
|
(€607) |
(€3,765) |
PROVIDENCE RESOURCES
P.l.c.Note
11 – Earnings per
share
|
6 months ended 30 June
2021 |
6 months ended 30 June
2020 |
Year ended 31 December
2020 |
|
Unaudited |
Unaudited |
Audited |
|
€’000 |
€’000 |
€’000 |
|
|
|
|
Profit/(loss) attributable to equity holders of the company from
continuing operations |
1,628 |
(9,247) |
(10,358) |
|
|
|
|
The basic weighted average number of Ordinary shares in issue
(‘000) |
|
|
|
|
|
|
|
In issue at beginning of year and end of period |
888,803 |
657,425 |
657,425 |
Adjusted for share issue in period |
30,675 |
55,739 |
130,519 |
|
|
|
|
Weighted average number of ordinary shares |
919,478 |
713,164 |
787,944 |
|
|
|
|
Basic profit/(loss) per
share (cent) |
0.18 |
(1.30) |
(1.31) |
|
|
|
|
Dilutive shares |
217,900 |
- |
- |
Weighted average number of ordinary shares |
1,137,378 |
- |
- |
Diluted
profit/(loss)
per share (cent) |
0.14 |
(1.30) |
(1.31) |
There is a difference in the basic and dilutive profit for
ordinary share in the period to 30 June 2021.
However, for prior period, there is no difference between the
loss per ordinary share and the diluted loss per share for the
reported periods as all potentially dilutive ordinary shares
outstanding are anti-dilutive.
There were 39,927,000 (2020: 41,150,000) anti-dilutive share
options and 177,973,004 (2020: 355,946,008) anti-dilutive warrants
in issue as at 30 June 2021.
Note 12
– Share schemes
Share option schemes were introduced in August 1997 (expired
August 2007), May 2005 (expired October 2015) and June 2009
(expired in June 2019) under which share options may be offered to
employees, Directors and consultants. In addition, a long-term
incentive plan was introduced in 2016. Options are recommended at a
level to attract retain and motivate participants in the
competitive environment in which the Group operates, The
Remuneration Committee reviews and assesses proposals to grant
share options to participants.
The Group operates the following employee share schemes:
2020 Scheme
In 2020, the directors adopted a share option scheme which
contains certain performance criteria. No options can be issued
after 10 years of the scheme. The option price is the market price
immediately preceding the date of the grant. The “2020 scheme”
operates as an equity-settled share option scheme and the options
granted are subject to certain conditions. No option is exercisable
more than seven years after grant date and no option is exercisable
within one year of grant.
PROVIDENCE RESOURCES P.l.c.Note 12 –
Share schemes (continued)
The applicable criteria for the exercise of the options are;
(i) 33% of the total number
of options granted are exercisable after
one.(ii) 33% of the total number
of options granted are exercisable after two
years.(iii) The remaining 33% of
the total number of options granted are exercisable after a further
year has elapsed.
During the period, 9,000,000 share options were granted under
the 2020 Share option scheme. The 9,000,000 options
were granted to the Directors.
Grant Date |
21 May 2021 |
Number of options granted |
9,000,000 |
Volatility |
150% |
Time period |
7 Years |
Dividend yield |
0% |
Risk free interest rate |
(0.0156%) |
Exercise price |
€0.038 |
The total share based payments expense in the period to 30 June
2021 charged to the income statement was €156,000 (2020:
€216,000).
Note 13 -
Commitments
As at 30 June 2021, the Group has capital commitments of
approximately €1.5m (30 June 2020: €0.3m) to contribute to its
share of costs of exploration and evaluation activities.
Note 14 – Post Balance
Sheet Events
Pat Plunkett resigned from the Board and
chairman on 22 July 2021. James Menton was appointed chairman.
Ann-Marie O’Sullivan and Peter Newman were
appointed to the Board on 23 July 2021.
There were 4,500,000 share options awarded to
both Ann-Marie O’Sullivan and Peter Newman on the 18 August
2021.
There have been no other significant events
since the balance sheet date which would require disclosure in or
amendment of these interim financial statements.
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