Interim Results

Unaudited Interim Accounts for the six months ended 30 June 2020.

 

Chair's Statement

This interim accounts covers the six-months period to 30 June 2020, during this period the Company completed the sale of Anglo African Oil & Gas Congo S.A.U ("AAOG Congo") the Company's Congolese subsidiary which held the working interest in the Tilapia Asset.

Faced with very limited cash resources and unable to fund the ongoing operational costs and liabilities of AAOG and AAOG Congo, and having considered the alternatives in detail with its advisers, the Board took the decision that the best option for Ordinary Shareholders was to find a buyer for AAOG Congo.

The Company announced on 27 December 2019, that it had entered into a conditional sale and purchase agreement ("SPA") with Zenith Energy Ltd for the sale of an 80% interest in AAOG Congo which holds a 56% interest in Tilapia in the Republic of the Congo ("Disposal").

The consideration for the Disposal was £1 million, of which £500,000 was in six equal monthly cash instalments from the date of completion and £500,000 of Zenith Ordinary Shares. In addition, Zenith was to fund AAOG's share of a US$5.5 million work programme on Tilapia and fund the upfront cash element of any signature bonus payable for the new licence negotiated with Congolese Ministry of Hydrocarbons. 

The Disposal would have resulted in AAOG retaining a carried interest in AAOG Congo without the requirement to raise additional funds for the future work programme.

The Company had anticipated that completion of the Disposal would take place swiftly following the shareholders' meeting in January 2020.  Indeed, AAOG's cash position did not at the time allow for the completion of the Disposal to be delayed much beyond that.  Disappointingly, Ministerial consent in the Republic of Congo to the change of control of AAOGC, a condition to the Disposal, was not forthcoming.  Neither AAOG nor Zenith could say with any certainty when such consent would be forthcoming, particularly in light of the COVID-19 pandemic which restricted the ability to meet with officials and progress matters.

AAOGC's creditor position in December 2019 was circa $3 million and the team in country was continuing operations and managing the creditors carefully with the cash that AAOG had been able to contribute as well as receipts from the sale of oil production from the Tilapia field.  Since 20 January 2020, AAOG's primary cash source has been its strategic investor, Forum Energy Services Limited ("Forum"). Forum has indicated to the Board of AAOG that it was not prepared to fund any further cash calls from AAOGC given the uncertainty outlined above. This coupled with the collapse in the oil price in March 2020 and the impact of the COVID-19 pandemic meant a worsening financial position for AAOGC.

The Board of AAOG faced the very real prospect of AAOGC falling into some form of insolvency procedure which would obviously mean the Disposal would not complete and the Company would receive none of the consideration from Zenith.

Given the uncertainty as to the timing of completion of the Disposal, as well as no certainty on when AAOG could expect to receive funds from Zenith and when Zenith would assume AAOGC's liabilities and running costs pursuant to the Disposal, the Company and Zenith therefore entered into an agreement in April 2020 to accelerate the assumption by Zenith of the running costs and liabilities of AAOGC, as well as amend the terms of the consideration payable pursuant to the Disposal (the "Consideration") and the terms of Completion.

The Company agreed to Dispose of 100% of AAOG's interest in AAOGC rather than the 80% originally envisaged. The Consideration was amended to £200,000 which was paid in cash.  The payment of the Consideration was not conditional on Ministerial consent. Zenith therefore acquired 100% of AAOGC on 3 May 2020 and assumed responsibility for all liabilities within and ongoing costs associated with AAOGC from that Date.  As a result, shareholders in AAOG no longer have any exposure to the Tilapia asset or its liabilities or receivables.

The Disposal constituted a fundamental change of business of the Company as the Company ceased to own, control or conduct all or substantially all, of its existing trading business, activities or assets. The Company is now therefore an AIM Rule 15 cash shell and as such will be required to make an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission as an investing company (as defined under the AIM Rules)) on or before the date falling six months from 5 May 2020 or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least £6 million) failing which, the Company's Ordinary Shares will then be suspended from trading on AIM pursuant to AIM Rule 40. Admission to trading on AIM will be cancelled six months from the date of suspension should the reason for the suspension not have been rectified.

The Company is now actively seeking an acquisition of an asset or a company with the ability to increase value for shareholders and the Board is actively reviewing opportunities.

Results for the year

Group's Loss for the period from continuing operations £462,000 (2019 - £2,212,000), the reduced loss is due to lower staffing costs and overhead's since the marketing and sale of AAOG.

With the sale of AAOGC the Company continues to review and reduce overhead costs, as it seeks new opportunities.

Finance

To protect the interests of its members the Company has entered into an unsecured convertible loan note in June 2020 amounting to £1,500,000 the first drawdown of £160,000 was completes on 12 June 2020. All drawdowns and associated fees are convertible into ordinary shares.

 

The Company continues to discuss finance options with external investors and its major shareholder.

 

Overall strategy

With the sale of its only asset in May 2020, the Company is currently an AIM Rule 15 cash shell and is currently looking at opportunities for acquisitions that will establish a near term cash generating business in the natural resources sector.

The board will keep shareholders informed of its progress on a regular basis.

 

Sarah Cope
Non-Executive Chair

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

  

SIX

MONTHS

SIX

MONTHS

 

YEAR

  

ENDED

ENDED

ENDED

  

30.06.20

30.06.19

31.12.19

   

(Restated *)

(audited)

 

Notes

£'000

£'000

£'000

     

Continuing operations

    

Revenue

 

-

-

-

Cost of sales

 

-

-

(755)

  

-      

-      

(755)

     

Administrative expenses

5

(462)

(1,970)

(3,604)

Share-based payment (charge) /credit

 

-

(47)

135

Loss from operating activities before exceptional items

 

(462)

(2,017)

(4,224)

     

Fundraising costs

 

-

(195)

-

Loss from operating activities

 

(462)

(2,212)

(4,224)

     

Finance costs

 

-

-

(4,675)

Loss before tax

 

(462)

(2,212)

(8,899)

Taxation

 

-

-

-

Loss for the period from continuing activities

 

(462)

 

(2,212)

(8,899)

Loss for the period from discontinued operation

9

(172)

(241)

(10,495)

Total loss for the year

 

(634)

(2,453)

(19,394)

     

Other comprehensive loss

    

Exchange differences on translating foreign operations

 

229

60

40

Total comprehensive loss for the period

 

(405)

(2,393)

(19,354)

     

Loss per share

    

Basic earnings (loss) per share

6

   

-  From continuing operations

 

(0.10)

(0.92)

(2.87)

-  From discontinued operations

 

(0.04)

(0.11)

(3.39)

 

Total

 

 

(0.14)

 

(1.03)

 

(6.26)

     

 

 

*The 30 June 2019 comprehensive income number have been restated for discontinued operation, see note 9

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 JUNE 2020

  

30 June

30 June

31 December

  

2020

2019

2019

    

(audited)

 

Notes

£'000

£'000

£'000

     

Non-current assets

    

Property, plant and equipment

7

-

139

-

Intangible assets

8

-

12,709

-

  

-

12,848

-

     

Current assets

    

Assets included in disposal group

    

classified as held for sale

9

-

-

5,482

Stock

 

-

37

-

Trade and other receivables

10

52

3,651

497

Prepayments

 

77

89

9

Cash and cash equivalents

 

170

739

170

  

299

4,516

6,158

     

Total assets

 

299

17,364

6,158

     

Equity

    

Share capital

11

24,274

16,273

24,203

Share premium

 

17,210

17,159

17,110

Currency revaluation reserve

 

-

249

229

Retained deficit

 

(41,879)

(24,351)

(41,474)

  

(395)

9,330

68

     

Current liabilities

    

Liabilities included in disposal group

    

classified as held for sale

9

-

-

5,379

Trade and other payables

 

694

5,118

711

Provisions

12

-

2,916

-

  

694

8,034

6,090

     

Total equity and liabilities

 

299

17,364

6,158

     

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

Share capital

 

Share premium

 

Currency translation reserve

 

Retained deficit

 

 

 

Total

 

£'000

£'000

£'000

£'000

£'000

      

Balance at 31 December 2018

13,272

14,492

189

(21,945)

6,008

      

Share issue for the period

3,000

3,000

-

-

6,000

Costs of issue of share capital

-

(333)

-

-

(333)

Share-based payment charge

-

-

-

47

47

Total comprehensive loss for the period

-

-

60

(2,453)

(2,393)

      

Balance at 30 June 2019

16,272

17,159

249

(24,351)

9,329

      

Share issue for the period

7,931

318

-

-

8,249

Costs of issue of share capital

-

(367)

-

-

(367)

Share-based payment credit

-

-

 

(182)

(182)

Total comprehensive loss for the period

-

-

(20)

(16,941)

(16,961)

      

Balance at 31 December 2019

24,203

17,110

229

(41,474)

68

      

Share issue for the period

71

100

-

-

171

Total comprehensive loss for the period

-

-

(229)

(405)

(634)

Balance at 30 June 2020

24,274

17,210

-

(41,879)

(395)

      

 

 

CONSOLIDATED STATEMENT OF CASHFLOWS

  

SIX

MONTHS

SIX

 MONTHS

 

YEAR

  

ENDED

ENDED

ENDED

  

30.06.20

30.06.19

31.12.19

   

(* Restated)

(audited)

  

£'000

£'000

£'000

     

Cash flows from operating activities

    

Total comprehensive loss for the period

 

(462)

(2,212)

(8,899)

Depreciation and amortisation

  

13

11

Impairment of fixed assets

 

-

-

27

Loss on issue of own equity

 

-

-

4,675

Share-based payment charge/(credit)

  

47

(135)

Net cash used in continuing operation

 

(462)

(2,152)

(4,321)

Net cash used in discontinued operation

 

(172)

(310)

(1,482)

Net cash used in operating activities

 

(634)

(2,462)

(5,803)

     

Decrease/(increase) in trade and other receivables

 

445

(20)

(203)

(Increase)/decrease in prepayments

 

(68)

(44)

36

Decrease in trade and other payables

 

(17)

(159)

(756)

     

Cash used in operating activities

 

(274)

(2,685)   

(6,726)

     

Cash flows from investing activities

    

Proceeds from sale of investment in subsidiary

 

103

-

-

Purchase of tangible fixed assets

 

-

-

(8)

Cash used by discontinued operations

 

-

(2,364)

(2,065)

     

Net cash from/used in investing activities

 

103

(2,364)

(2,073)

     

Cash flows from financing activities

    

Issue of share capital

 

171

6,000

9,574

Costs of issuing share capital

 

-

(333)

(700)

     

Net cash flows from financing activities

 

171

5,667

8,874

 

Net increase in cash and cash equivalents

 

-

618

75

     

Cash and cash equivalents at beginning of period

 

170

121

121

     

Cash and cash equivalents at year end

 

170

739

196

     

Cash and cash equivalents included in disposal group

 

-

(675)

(26)

     

Cash and cash equivalents at end of period

 

170

64

170

     

 

*The 30 June 2019 Consolidated Statement of Cash Flow has been restated for discontinued operation, see note 9.

 

Notes

The notes are available in the PDF download

Page last updated: 08 September 2020