Latest Results

Half Year Report

Anglo African Oil & Gas plc, an independent oil and gas developer, is pleased to publish its unaudited results for the six months ended 30 June 2018.

HIGHLIGHTS

  • Appointment of James Berwick as Chief Executive Officer
  • Three non-executive directors appointed to the board
  • Operational team in-country restructured and strengthened
  • Completion of two successful workovers on TLP-101 and TLP-102
  • Drilling rig contracted, mobilised and operational ahead of schedule
  • Spud of well TLP-103C scheduled for week commencing 8 October
  • Strengthening of the Company's relationships with government and SNPC
  • Expansion of the Tilapia site in preparation for the future development programme
  • Placing raised US$10m (£7.4m) in June.

 

CHAIRMAN'S LETTER

Dear shareholder,

This report and accounts cover the six months to 30 June 2018, during which, with new management in place, the Company finally moved to deliver on the potential of its Tilapia asset and build up to the drilling of a new well.

Capital and financial planning

As I mentioned in the recent annual report, the entire board and I are very grateful to members for their support in the placing that closed in June 2018. That placing has enabled the Company to move forward with drilling the new well, whether or not its partners contribute to the upfront costs. This well is pivotal to the value of the Company.

In addition to the placing, and as part of our contingency planning, we also took the precautionary step of discussing with interested providers debt facilities which, if agreed, will be structured in a way that gives the Company and its members control over any dilutive effect on the shares. These negotiations took place over the summer and the importance of having done so was evident when the Company faced the situation of having to absorb costs relating to the re-spud of the new well.

This approach to capital planning is an ongoing process. We are very aware of the need to protect the interests of members and are actively developing plans that will enable the Company to grow and develop the Tilapia asset, as well as to acquire new assets, while at the same time ensuring that in doing so there must be accretive value to the shareholders.

New management team

As I mentioned in my letter in the annual report, we now have in place an experienced operational team led by James Berwick supported by a strong board with complementary skills and experience. The new directors have proved to be invaluable in our deliberations over the past nine months.

James Berwick's letter provides an up-to-date review of the operational progress made by the Company since his appointment. I would add that AAOG's team in-country have proved to be dedicated and professional, and we are most grateful to them for their hard work and determined approach to the challenges that we have faced.

I would also like to take this opportunity to introduce two new members of the non-board, executive team. Jeremy Patullo has joined from Chevron to provide further support on the finance side and brings with him a wealth of experience in budgeting and managing capital projects. In addition, David Livingston has joined from Upstream Risk Management and is providing much needed support to James Berwick in managing the operations.

New licence

As I reported in June, the Company's investment in the Tilapia field has been welcomed by the Congolese authorities. We have been told by the authorities that the drilling of TLP-103C, and our interest in other fields in the country, are the significant factors in the granting a new licence for Tilapia, and we expect the process to complete shortly.

Overall strategy

At the moment, the focus remains on drilling what is now designated as TLP-103C. We have also developed plans for the full development of the Tilapia field, with the variations on that plan depending on the results of TLP-103C.

In addition, we have progressed discussions on new asset opportunities which fit with the Company's continued strategy of becoming a lean, profitable oil producer with a focus on the bottom line and a clear and unswerving commitment to the payment of dividends. We look forward to progressing these discussions further.

We look forward to keeping members updated on progress.

 

David Sefton
Executive chairman

27 September 2018

 

CHIEF EXECUTIVE'S LETTER

Dear shareholder,

I would like to take this opportunity to summarise the progress that the Company has made in the six months to 30 June 2018 and provide an operational update on works completed and future plans for the Tilapia site during this and the next financial period:

Six months to 30 June 2018

During the period under review, the Company made considerable strides towards its primary goal of turning the Tilapia site into a profitable, cash-generative asset. We have recruited new members to the operational team and restructured our operations in the Congo so that the Company now has a balanced and highly experienced group of oilfield specialists. Their expertise has enabled the Company to prepare and execute on a revised and greatly improved drilling programme that takes account of the increased knowledge of the asset and its geology that we have acquired since the start of the year. We have introduced a more stringent health and safety code of practice for our operations that provides the reassurance of best practice to our extensive team of employees and contractors on site (the majority of whom are Congolese nationals). In addition, we have built strong relationships with, among many others, the government department supervising our activities, and with SNPC, the national oil company. I am delighted to report that the group as a whole has worked collaboratively and most effectively during an intense period of planning and execution.

TLP-101 and TLP-102

The Company has during this period completed two successful workovers on wells TLP-101 and TLP-102 and is now in the process of analysing the results with a view to increasing production from its existing infrastructure.

TLP-103C

The TLP-103 well was spudded on 15 August but at approximately 290 metres we encountered a thief zone in the formation which caused the rig to shift on its pads some 50cm. It was decided, because of this movement, that it would be unsafe to continue drilling in this location. As a result, the Company gave instructions to abandon the current location and move 95m northwest of the 103 well and re-spud the well as TLP-103C.

A specialist rig, drilling and site inspector was despatched to the Tilapia site immediately on notification of the incident. Contingency planning has been included in the new 103C well design in order best to mitigate any further issues in the troublesome formation encountered on well 103. In order to accommodate the location change, the Company was required to complete remedial civil works to extend the drilling pad by some 50m, giving ample room for future development on the site. Construction of the new pad is now complete, and the Company expects to spud well TLP-103C during the week commencing 8 October 2018.

The Company through its contacts has been able to secure all the required long lead items to replace and enhance the new well.

Summary

Whilst we have encountered a short delay in the drilling of well 103, the operational team, drilling contractor and support services have all performed superbly over this period. 

We will continue to conduct our operations in line with best industry practice and we look forward to announcing positive news flow in the next financial period.

 

James Berwick
Chief executive officer
27 September 2018

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2018 (unaudited)

    Six months ended
30 June 2018
Six months ended
30 June 2017
Year ended
31 December 2017
        (audited)
  Notes £ £ £
         
CONTINUING OPERATIONS        
Revenue   106,378 65,661 226,757
Cost of sales   (385,121) (285,500) (405,349)
         
GROSS (LOSS)   (278,743) (219,839) (178,592)
         
Administrative expenses   (1,605,175) (587,186) (2,405,864)
Share-based payment charges   (153,633) - (138,332)
         
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS   (2,037,551) (807,025) (2,722,788)
         
Fundraising costs   (133,254) - -
AIM admission costs    - (287,615) (363,869)
         
LOSS FROM OPERATING ACTIVITIES   (2,170,805) (1,094,640) (3,086,657)
         
Finance income   - - 8,131
Finance costs   (801) (61,941) (62,543)
         
LOSS BEFORE TAX   (2,171,606) (1,156,581) (3,141,069)
         
Taxation   - (3,196) -
         
LOSS FOR THE PERIOD FROM OPERATING ACTIVITIES   (2,171,606) (1,159,777) (3,141,069)
         
Exchange translation on foreign operations   (41,349) - 215,514
         
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD    

(2,212,955)
 

(1,159,777)
 

(2,925,555)
         
Attributable to:        
Owners of the company   (2,212,955) (1,191,282) (2,925,555)
Non-controlling interests   - 31,505 -
         
Basic and diluted loss per ordinary share (pence) 6 (2.71) (3.41) (5.75)

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2018 (unaudited)

    30 June 30 June 31 December
    2018 2017 2017
        (audited)
  Notes £ £ £
         
NON-CURRENT ASSETS        
Property, plant and equipment 7 2,818,066 227,138 3,048,818
Intangible assets 8 8,378,540 3,208,148 7,592,008
         
    11,196,606 3,435,286 10,640,826
         
CURRENT ASSETS        
Trade and other receivables   1,546,955 1,114,740 245,275
Prepayments   8,305 - 4,215
Cash and cash equivalents   6,502,407 5,040,661 2,696,911
         
    8,057,667 6,155,401 2,946,401
         
TOTAL ASSETS   19,254,273 9,590,687 13,587,227
         
EQUITY
SHAREHOLDERS' EQUITY
       
Share capital 9 12,478,811 7,033,537 7,851,238
Share premium   14,286,058 8,091,064 12,003,418
Currency revaluation reserve   330,722 205,444 372,071
Retained deficit   (12,311,610) (8,482,182) (10,293,637)
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY   14,783,981 6,847,863 9,933,090
         
Non-controlling interests   - (1,164,227) -
         
TOTAL EQUITY   14,783,981 5,683,636 9,933,090
         
CURRENT LIABILITIES        
Trade and other payables   1,858,246 1,194,705 1,027,091
Loans and borrowings   - - 15,000
Provisions   123,524 123,524 123,524
    1,981,770 1,318,229 1,165,615
LONG TERM LIABILITIES        
Provisions   2,488,522 2,588,822 2,488,522
         
TOTAL EQUITY AND LIABILITIES   19,254,273 9,590,687 13,587,227

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2018 (unaudited)

  Share
capital
Share
premium
Currency
revaluation
reserve
Retained
deficit
Non-
controlling
interest
Total
  £ £ £ £ £ £
             
Balance at 31 December 2016 4,463,008 1,555,144 156,557 (7,290,900) - (1,116,191)
             
Changes in equity            
Acquisition of subsidiary - - - - (1,195,732) (1,195,732)
Issue of share capital 2,570,529 7,630,065 - - - 10,200,594
Costs of issuing equity - (1,094,145) - - - (1,094,145)
Currency translation - - 48,887 - - 48,887
Total comprehensive expense - - - (1,191,282) 31,505 (1,159,777)
             
Balance at 30 June 2017 7,033,537 8,091,064 205,444 (8,482,182) (1,164,227) 5,683,636
             
Changes in equity            
Acquisition of subsidiary - - - - 1,164,227 1,164,227
Issue of share capital 817,701 3,954,964 - - - 4,772,665
Costs of issuing equity - (42,610) - - - (42,610)
Share-based payment charges - - - 138,332 - 138,332
Currency translation - - 166,627 - - 166,627
Total comprehensive expense - - - (1,949,787) - (1,949,787)
             
Balance at 31 December 2017 7,851,238 12,003,418 372,071 (10,293,637) - 9,933,090
             
Changes in equity            
Issue of share capital 4,627,573 2,776,544 - - - 7,404,117
Costs of issuing equity instruments - (493,904) - - - (493,904)
Share-based payment charges - - - 153,633 - 153,633
Currency translation - - (41,349) - - (41,349)
Total comprehensive expense - - - (2,171,606) - (2,171,606)
             
Balance at 30 June 2018 12,478,811 14,286,058 330,722 (12,311,610) - 14,783,981

 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2018 (unaudited)

  Six months ended
30 June 2018
Six months ended
30 June 2017
Year ended
31 December 2017
      (audited)
  £ £ £
       
Cash flows from operating activities      
Loss for the period (2,171,606) (1,156,581) (3,141,069)
Adjustments for:      
Taxation - (3,196) -
Depreciation and amortisation 901 38,167 86,473
Provision movement - 16,560 2,488,522
Currency exchange movement (41,349) 48,887 215,514
Share-based payment charge 153,633 -  138,332
  (2,058,421) (1,056,163) (212,228)
       
       
Increase in trade and other receivables (1,301,680) (493,759) (160,929)
Increase in prepayments (4,090) - (4,215)
Decrease/(increase) in trade and other payables 831,155 (587,929) (2,000)
       
Cash used in operating activities (2,533,036) (2,137,851) (379,372)
       
       
Cash flows from investing activities      
Purchase of tangible fixed assets (108,747) (73,202) (3,112,816)
Purchase of intangible fixed assets (786,532) - (1,051,348)
Disposal of tangible fixed assets 338,598 - -
Acquisition of subsidiaries net of cash received - (1,806,813) (6,563,135)
       
Cash used in investing activities (556,681) (1,880,015) (10,727,299)
       
       
Cash flows from financing activities      
Loan repayment (15,000) (50,000) (35,000)
Issue of share capital 7,404,117 10,200,594 14,973,259
Costs of issuing equity instruments (493,904) (1,094,145) (1,136,755)
       
Cash from financing activities 6,895,213 9,056,449 13,801,504
       
Increase in cash and cash equivalents 3,805,496 5,038,583 2,694,833
       
Cash and cash equivalents at beginning of period 2,696,911 2,078 2,078
       
Cash and cash equivalents at end of period 6,502,407 5,040,661 2,696,911

 

NOTES

The notes to the financial statement are available in the PDF download.

 

Page last updated: 28 September 2018

 
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