TIDMDOR
RNS Number : 7575A
Doriemus PLC
30 September 2015
30 September 2015
Doriemus PLC
Half-yearly results for the six month period ended 30 June
2015
Your board is pleased to present the interim results for the six
months ended 30 June 2015.
Overview
The Company announced on 11 September 2015 that it had acquired,
on a fully diluted basis, an initial 2.82% equity shareholding in
Greenland Gas & Oil Plc ("GGO"), a UK based oil and gas
exploration company focused solely on Greenland, which in June 2015
was granted oil exploration and exploitation licences over 4,200
km2 located onshore in south-eastern Greenland in a region known as
the Jameson Land Basin. For further information on GGO, please
refer to their website www.ggoplc.com.
In addition, Doriemus has entered into an option agreement (the
"Option") to acquire a further 60.56%, on a fully diluted basis, of
the existing issued share capital in GGO. Exercise of the Option is
subject, inter alia, to GGO achieving their necessary shareholder
approvals to convert to a private limited company and to Doriemus
shareholder and regulatory approvals including Government of
Greenland approvals where appropriate.
Whilst there can be no certainty that the Option will be
exercised, exercise of the Option in full would constitute a
reverse takeover under AIM Rule 14 and the Company therefore
requested that dealings in its shares be suspended from trading on
AIM on 11 September 2015. Subject to due diligence, the Company
would hope to be in a position to send to shareholders in the New
Year a circular containing further details on GGO and the
transaction and seeking their approval at a general meeting.
The Company also awaits flow testing results from the Horse
Hill-1 well in the Weald Basin just north of Gatwick Airport. Horse
Hill Developments Limited ("HHDL") is planning to perform a flow
test later in 2015 to test the Portland Sandstone, in order to
establish the feasibility of a commercial development of the oil
estimated to be in place in the reservoir. HHDL is progressing the
required regulatory application with the Environment Agency.
Background
The Company announced on 12 September 2014 that the disposal of
TEP Exchange ("TEP") had been completed. This concluded the
transition of the Company from the historical TEP Exchange Group
Plc, whose primary business was unsuccessful in the licensing and
on-line advertising of TEP's proprietary electronic platform, to a
company with a new focus of investing in conventional oil and gas
production and exploration activities in Europe.
This disposal constituted a change of business for the purpose
of Rule 15 of the AIM Rules for Companies and therefore the Company
was, with effect from 12 September 2014, re-classified as an
investing company.
As an investing company it was required to make an acquisition
or acquisitions which constituted a reverse takeover under the AIM
Rules or otherwise implement its investing policy within the next
12 months.
The existing investments in HHDL, Lidsey and Brockham made by
the Company prior to the disposal of TEP and the adoption of the
new investing policy pursuant to AIM Rule 15 did not count towards
the consideration as to whether the Company had implemented its
investing policy pursuant to AIM Rule 8.
The Company attempted to otherwise implement its investing
policy by investing the majority of its available cash in suitable
investments.
The investment committee conducted due diligence on several
further investment opportunities in the oil and gas sector in
Europe with potential for growth in relation to implementing its
investing strategy. However these minority investments were not
deemed sufficient for the Company to be considered to have
implemented its investing policy pursuant to AIM Rule 8. It was
considered, under the circumstances, that the investment in GGO and
potential reverse takeover described above, and in more detail
below, represented the best opportunity for the Company to
implement its investing strategy.
Investments
Investment in Greenland Gas & Oil Plc
(2.82% interest in GGO)
The Company currently owns an initial 2.82% equity shareholding
in Greenland Gas & Oil Plc ("GGO"), a UK based oil and gas
exploration company focused solely on Greenland, which in June 2015
was granted oil exploration and exploitation licences over 4,200
km2 located onshore in south-eastern Greenland in a region known as
the Jameson Land Basin. For further information on GGO, please
refer to their website www.ggoplc.com.
Details of the transaction:
-- Doriemus has acquired 2.82% of the issued share capital of
GGO, on a fully diluted basis, for a cash consideration of
GBP250,000.
-- Doriemus has also entered into the Option with ten
shareholders ("Sellers") of GGO granting Doriemus an option to
acquire a further 60.56% of the current issued share capital of
GGO, on a fully diluted basis.
-- The consideration payable on exercise of the Option shall be
satisfied by the issue and allotment to each of the Sellers of such
number of shares in Doriemus ("Consideration Shares") as calculated
on the basis of 22.01 Doriemus Shares for each GGO share held by a
Seller. On that basis, the total number of Consideration Shares to
be issued on exercising the Option to acquire 60.56% of GGO's
current shares, on a fully diluted basis, will be 9,084,236,189,
which would represent approximately 54% of the enlarged issued
share capital of Doriemus.
-- The number of Consideration Shares has been calculated by
reference to the closing price of the Company's ordinary shares on
9 September 2015 and on the basis that the entire issued share
capital of GGO as at the date of completion and not already owned
by the Company is valued at GBP8.25 million.
-- The Option can be exercised at any time up to 31 March 2016.
Whilst there can be no certainty that the Option will be
exercised, exercise of the Option in full would constitute a
reverse takeover under AIM Rule 14 and the Company therefore
requested that dealings in its shares be suspended from trading on
AIM on 11 September 2015. The Company would hope to be in a
position to send to its shareholders in the New Year a circular
containing further details on GGO and the transaction and seeking
their approval at a general meeting. Further announcements will be
made in due course.
In the event that a reverse takeover is not completed or the
implementation of the Company's investing policy is not effected by
14 March 2016, the Company's shares will be cancelled from AIM
pursuant to AIM Rule 41. In the meantime, dealings in its shares
will remain suspended pursuant to AIM Rule 15.
Investment in Horse Hill Developments Limited:
(10% interest in HHDL)
The Company currently owns a 10% interest in a special purpose
company, Horse Hill Developments Limited, which is the operator and
65% interest holder in two Petroleum Exploration and Development
Licences ("PEDL") PEDL 137 and 246 in the northern Weald Basin
between Gatwick Airport and London.
The PEDL137 licence covers 99.29 square kilometres (24,525
acres) to the north of Gatwick Airport in Surrey and contains the
Horse Hill-1 ("HH-1") discovery and several other exploration
leads. PEDL246 covers an area of 43.58 square kilometres (10,769
acres) and lies immediately adjacent and to the east of
PEDL137.
The HH-1 well is located approximately 7.5 kilometres southeast
of the producing Brockham oil field and approximately 15 kilometres
southwest of the Palmers Wood oil field. The pre-drill primary
target reservoir horizons were the Portland Sandstone, which is
productive in the Brockham oil field, and the Corallian Formation,
which is the producing horizon in the Palmers Wood oil field.
Secondary targets for the well included the Triassic, which is
productive in the nearby Wessex Basin and has previously tested gas
in the Weald Basin, and the Greater Oolite Formation.
In May 2015, an independent oil in place ("OIP") review of the
Upper Portland Sandstone discovery by the Xodus Group was released,
which saw initial OIP estimates substantially increased to 21.0
million barrels, ("mmbbl", Best Estimate, P50).
The estimated gross oil in place in the Portland Sandstone at
the various stages of evaluation is tabulated in Table 1 below.
Table 1: Gross estimated discovered oil initially in place in
Portland Sandstone at Horse Hill (mmbbl)
Source Date Low (P90) Best High Mean
(P50) (P10)
------------------ ------------- ---------- ------- ------- -----
Company Internal 24 October
estimate 2014 1.5 3.1 4.8 n/a
------------------ ------------- ---------- ------- ------- -----
Company Internal 17 December
estimate 2014 5.7 8.2 12.1 n/a
------------------ ------------- ---------- ------- ------- -----
Xodus Group 11 May 2015 14.3 21.0 30.4 21.8
------------------ ------------- ---------- ------- ------- -----
n/a = not available
HHDL is planning to perform a HH-1 flow test later in 2015 to
test the Portland Sandstone, in order to establish the feasibility
of a commercial development of the oil estimated to be in place in
the reservoir. HHDL is progressing the required regulatory
application with the Environment Agency.
During drilling of HH-1 it was also noted that the Kimmeridge
limestones and surrounding shale contained oil. Following the
completion of the drilling of the well, extensive geochemical
analysis was conducted which showed the Kimmeridge formation was
mature for oil generation.
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Nutech Inc. ("Nutech"), an industry specialist in tight
reservoir analysis, was contracted to conduct further detailed
petrophysical evaluation of the electric logs. This work resulted
in the announcement in April 2015 of a potentially significant play
with estimated gross OIP of over 150 mmbbl per square mile
(gross).
The results of the work by Nutech have subsequently been
independently verified in May 2015 by Schlumberger, one of the
world's leading oil and gas service companies, using their
proprietary modelling developed in tight reservoirs in the USA and
applied extensively in the USA and elsewhere. Schlumberger's
estimate of OIP in the Kimmeridge, Oxford and Lias mudstones and
limestones is approximately 255 mmbbl per square mile (gross). If
confirmed, this largely unconventional play in the Kimmeridge opens
up large areas of the Weald Basin that may have potential for oil
production, not limited to the PEDL137 and PEDL246 licences where
Horse Hill is located.
In June 2015, Nutech calculated that the total Jurassic shale
plus tight conventional reservoir section contained in the 55
square miles of PEDL137 and PEDL246 is a Best Estimate, or P50, OIP
of 9,245 mmbbl. The most significant oil in place within the
Jurassic section is contained within the shales and tight
conventional reservoir limestone sequences of the Kimmeridge, with
a calculated Best Estimate, or P50, total Kimmeridge OIP of 5,230
mmbbl.
Again, in August 2015, Schlumberger independently verified
Nutech's Horse Hill OIP estimates contained in PEDL137 and PEDL246.
Schlumberger estimated a Mean OIP of 10,993 mmbbl, with Kimmeridge
OIP of 8,262 mmbbl. Schlumberge's OIP estimates are therefore 19%
higher than Nutech's in total over the two Horse Hill licences and
58% higher in the Kimmeridge.
All of the reviews and reports mentioned above state that the
hydrocarbon volumes estimated should not be construed as
recoverable resources or reserves.
Brockham Oil Field (10% interest operated by Angus Energy):
The Brockham Oil Field ("Brockham"), in the Weald Basin, is held
under UK Production Licence PL235. The operator Angus Energy has
advised that the average current production rate has shown no
material change since previously announced.
The situation in relation to the planned new side-track infill
production well at Brockham is as per previously announced.
Lidsey Oil Field (20% interest, operated by Angus Energy):
The Lidsey Oil Field ("Lidsey"), in the Weald Basin, is held
under UK Production Licence PL 241. The operator Angus Energy has
advised that the average current production rate has shown no
material change since previously announced.
The operator further advises that they intend to improve rates
by drilling Lidsey-2X, as previously announced.
The operator will advise all parties in due course as to when
they will drill this well, which is likely to be after completion
of testing of the Horse Hill-1 well.
Financial Results
During the period, the Company made a loss before taxation of
GBP166,000 (6 months ended 30 June 2014: loss GBP266,000, 12 months
ended 31 December 2014: loss GBP622,000). There was a weighted loss
per share of 0.002p (30 June 2014: loss per share 0.01p, 31
December 2014: loss per share 0.01p).
The Company has a strong balance sheet with no debt and cash as
at 30 June 2015 amounting to GBP1,257,000 (30 June 2014:
GBP785,000; 31 December 2014: GBP198,000).
Donald Strang
Chairman
30 September 2015
For further additional information please contact:
Doriemus plc
Donald Strang/Hamish Harris +44 (0) 20 7440 0640
Cairn Financial Advisers
LLP
Nominated Adviser
James Caithie/Sandy Jamieson +44 (0) 20 7148 7900
Optiva Securities Limited
Broker
Christian Dennis / Jeremy
King +44 (0) 20 3137 1902
Square1 Consulting
David Bick / Mark Longson +44 (0) 20 7929 5599
Glossary:
bbl = barrels of oil
bopd = barrels of oil per day
discovery = a petroleum accumulation for which one or several
exploratory wells have established through testing, sampling and/or
logging the existence of a significant quantity of potentially
moveable hydrocarbons
electric logs = tools used within the wellbore to measure the
rock & fluid properties of the surrounding formations
HH-1 = Horse Hill-1 well
MD = measure depth
mmbbl = million barrels of oil
PEDL = Petroleum Exploration and Development Licence
play = a set of known or postulated oil or gas accumulations
sharing similar geologic properties
reserves = those quantities of petroleum anticipated to be
commercially recoverable by application of development projects to
known accumulations from a given date forward under defined
conditions
reservoir = a subsurface rock formation containing an individual
natural accumulation of moveable petroleum
water cut = the volumetric proportion of a field's produced
fluids that is water
Company Statement of Comprehensive Income
Unaudited for the six months ended 30 June 2015
Six months ended 30 June 2015 Six months ended 30 June 2014 Year
(unaudited) (unaudited) ended
31 December
2014
(audited)
GBP'000 GBP'000 GBP'000
Revenue 34 66 130
Cost of Sales (42) (54) (83)
------------------------------ ------------------------------ -------------
Gross Profit (8) 12 47
Administrative expenses (158) (178) (414)
(Loss) from operations (166) (166) (367)
Finance income - - -
(Loss) on equity swap settlements - - (155)
Investment in subsidiary written-off - (100) (100)
(Loss) before income tax (166) (266) (622)
Income tax expense - - -
------------------------------ ------------------------------ -------------
(Loss) attributable to the owners of
the parent and total comprehensive
income for the period (166) (266) (622)
------------------------------ ------------------------------ -------------
Other comprehensive income
Fair value adjustment of equity swap (24) - (280)
------------------------------ ------------------------------ -------------
Other comprehensive income for the
period net of taxation (24) - (280)
Total comprehensive income for the
period attributable to equity holders
of the parent (190) (266) (902)
------------------------------ ------------------------------ -------------
(Loss) per share (Note 3)
Basic (loss) per share (0.002)p (0.01)p (0.01)p
Diluted (loss) per share (0.002)p (0.01)p (0.01)p
Company Statement of Changes in Equity
Unaudited for the six months ended 30 June 2015
Share Share Share Based Payment Hedging Retained Total
Capital Premium Reserve reserve Earnings Equity
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2014 47 2,280 236 - (410) 2,153
Issue of Share
capital 10 690 - - - 700
Share issue costs - (30) - - - (30)
Transactions with
owners 10 660 - - - 670
(Loss) for the year - - - - (622) (622)
Unrealised (loss) on
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equity swap - - - (280) - (280)
------------- ------------- -------------------- ------------- ------------- -------------
Total comprehensive
loss for the year - - - (280) (622) (902)
At 31 December 2014 57 2,940 236 (280) (1,032) 1,921
Shares issued in
period 20 1,180 - - - 1,200
Share issue costs - (82) - - - (82)
Transactions with
owners 20 1,098 - - - 1,118
(Loss) for the
period - - - - (166) (166)
Unrealised (loss) on
equity swap - - - (24) - (24)
------------- ------------- -------------------- ------------- ------------- -------------
Total comprehensive
loss for the period - - - (24) (166) (190)
At 30 June 2015 77 4,038 236 (304) (1,198) 2,849
============= ============= ==================== ============= ============= =============
Company Statement of Financial Position
Unaudited as at 30 June 2015
As at 30 June 2015 As at 30 June 2014 As at
(unaudited) (unaudited) 31 December
GBP'000 GBP'000 2014
(audited)
GBP'000
ASSETS
Non-current assets
Intangible assets 1,051 1,016 1,051
Available for Sale Investment 600 600 600
Total non-current assets 1,651 1,616 1,651
Current assets
Trade and other receivables 423 148 408
Derivative financial instruments - 382 -
Cash and cash equivalents 1,257 785 198
------------------- ------------------- -------------
Total current assets 1,680 1,315 606
------------------- ------------------- -------------
TOTAL ASSETS 3,331 2,931 2,257
------------------- ------------------- -------------
LIABILITIES
Current liabilities
Trade and other payables (378) (532) (256)
Derivative financial instruments (104) - (80)
------------------- ------------------- -------------
Total current liabilities (482) (532) (336)
------------------- ------------------- -------------
TOTAL LIABILITIES (482) (532) (336)
------------------- ------------------- -------------
NET ASSETS 2,849 2,399 1,921
=================== =================== =============
Equity attributable to equity holders of the parent
Share capital 77 53 57
Share premium reserve 4,038 2,786 2,940
Share based payment reserve 236 236 236
Hedging reserve (304) - (280)
Retained earnings (1,198) (676) (1,032)
------------------- ------------------- -------------
TOTAL EQUITY 2,849 2,399 1,921
=================== =================== =============
Company Statement of Cash Flows
Unaudited for the six months ended 30 June 2015
Six months Six months Year
ended 30 ended 30
June 2015 June 2014
(unaudited) (unaudited)
GBP'000 GBP'000
ended
31 December
2014
(audited)
GBP'000
Cash flows from operating
activities
Operating (loss) (166) (166) (622)
Finance costs (net) - - -
Loss on equity swap settlements - - 155
Investment in subsidiaries
written-off - - 100
(Increase) / decrease in
trade and other receivables (15) 359 139
Increase / (decrease) in
trade and other payable 122 (673) (425)
------------- ------------- -------------
Cash generated by operating
activities (59) (480) (653)
Interest paid - - -
Net cash generated from
operating activities (59) (480) (653)
Cash flows from investing
activities
Payments for intangible
assets - - (35)
Payment for AFS Investment - (250) (600)
Loans (granted) to related
parties - - (214)
Interest received - - -
------------- ------------- -------------
Net cash used in investing
activities - (250) (849)
Cash flows from financing
activities
Proceeds from issuance of
ordinary shares 1,200 542 700
Share issue costs (82) (30) (30)
Equity swap settlements
receipts - 18 45
Net cash used in financing
activities 1,118 530 715
Net increase/(decrease)
in cash and cash equivalents 1,059 (200) (787)
Cash and cash equivalents
at beginning of period 198 985 985
------------- ------------- -------------
Cash and cash equivalents
at end of period 1,257 785 198
============= ============= =============
Cash and cash equivalents
comprise:
Cash available on demand 1,257 785 198
============= ============= =============
Notes to the unaudited financial statements for the 6 months to
30 June 2015
1. Basis of preparation
As permitted IAS 34, 'Interim Financial Reporting' has not been
applied to these half-yearly results. The financial information of
the Company for the six months ended 30 June 2015 have been
prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards,
International Accounting Standards and Interpretations
(collectively "IFRS") issued by the International Accounting
Standards Board ("IASB") as adopted by the European Union ("adopted
IFRS") and are in accordance with IFRS as issued by the IASB. The
condensed interim financial information has been prepared using the
accounting policies which will be applied in the Company's
statutory financial statements for the year ending 31 December
2015.
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