Lansdowne Oil & Gas has announced its audited results, for the year ended 31 December 2019. Lansdowne is an upstream oil and gas company, focused on exploration and appraisal activities in the North Celtic Sea Basin, off the south coast of Ireland. The Company has targeted the Irish offshore shelf areas close to existing operating infrastructure for exploration, as these provide shallow water (generally less than 100 metres), and relatively low drilling costs and the Directors believe that these factors, combined with favourable fiscal terms, have the potential to deliver high value reserves.
Lord Torrington, Independent Non-Executive Chairman, commented:
'2019 has proved another challenging year for the Company, however, the Board remains steadfast in its belief of the significant potential of Barryroe and is focused on unlocking its inherent value. The Board has been encouraged by the new Farm-Out campaign initiated in the fourth quarter of 2019 that has received a positive response from industry and we are now in detailed discussions with a potential counterparty that has been given a period of exclusivity in order to agree an appraisal work programme and develop commercial terms with the aim of concluding a binding Farm-Out agreement.
In addition to the challenges the Company already faced, the onset of the Coronavirus pandemic has impacted the entire global economy, resulting in a dramatic reduction in oil and gas consumption and a collapse in their prices.
In time the world will need to go back to work and oil and gas demand, and prices, will recover and this process is already underway.
We believe Barryroe remains an attractive opportunity, with substantial established oil and gas resources, in shallow water, close to existing infrastructure and with a low break-even price, estimated by the operator Providence to be c. $26/bbl.
The environmental concerns regarding oil and gas will not go away, but the evaluation of Carbon Capture and Storage options to accompany Barryroe development offers a responsible way to take the project forward whilst minimizing the carbon footprint.
Ireland will require diverse, cost effective and secure energy supplies as it rebuilds its economy and Barryroe can play an important role in this.
I would like to thank all our existing shareholders for the support and patience they have shown in 2019 and following the extraordinary events in 1H 2020. The Board believes Barryroe is a compelling appraisal asset with existing net 2C resources of 69MMboe (plus additional exploration potential), the Company is trading at a valuation of around US$0.11 per contingent resource barrel and, accordingly, we continue to believe there is the scope for a significant re-rating of the Company valuation upon announcement of a binding Farm-Out agreement and on future operational developments. Lansdowne is currently funded through to the end of 2020 and we look forward to updating shareholders on developments.'
- Barryroe Oil Field (SEL 1/11)
- Termination of the Farm-Out Agreement following the failure of APEC to fulfil the terms
- On 25 June 2019, the Company secured debt funding of £150,000 from LC Capital and £150,000 from Brandon Hill Capital, both existing significant shareholders in the Company.
- Cash balances at 31 December 2019 of £0.02 million (2018: £0.16 million).
- Operating expenses for the year were £0.1 million (2018: £0.2 million).
- Loss for the year after tax of £0.2 million (2018: loss £0.3 million).
- Diluted loss per share of 0.03 pence (2018: loss 0.05 pence).
Post-balance sheet events
- Barryroe Oil Field (SEL1/11)
- The process of reassignment of equity back to Providence/EXOLA and Lansdowne from APEC progressed with the Department of Communications Climate Action and the Environment (DCCAE)
- New farm-out process led to the signing of a term-sheet with SpotOn Energy Limited and granting of exclusivity through to 31 October 2020 with a view to concluding a binding farm-out
- In February 2020, the Company placed 83,333,333 new ordinary shares of 0.1 pence each ("Ordinary Shares") at a placing price of 0.6 pence a share to raise £500,000 before costs (the "Placing").
- At the same time, the Shareholder Loans entered into with Brandon Hill Capital Ltd. and LC Capital in June 2019, were converted into new Ordinary Shares at the Placing Price.
- In connection with the Placing and the conversion of the Shareholder Loans, the Company also granted a total of 139,368,491 warrants, on a one warrant per Placing or Loan Share basis, to subscribe for new Ordinary shares in the Company at a price of 1.2 pence per share, with an expiry of 31 December 2020.
- With low corporate overhead costs, following the February 2020 capital raise, Lansdowne has sufficient working capital to the end of 2020.
- The Company has net 2C Resources of 69 MMboe and is trading at a valuation of around $0.11 per contingent resource barrel.
Source: Lansdowne Oil & Gas