Lansdowne Oil & Gas plc – Final Results

Lansdowne Oil & Gas plc – Final Results

Lansdowne Oil & Gas plc (AIM: LOGP) is pleased to announce its audited results for the year ended 31 December 2018.

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. 

Unfortunately, a legal challenge by a third party relating to the process followed by the Irish regulator in awarding the original site survey permit to the operator, EXOLA, prevented them from advancing the asset in Q4 2018 as originally planned. Since the end of the period and following further consultation with the relevant authorities, the operator has submitted a new application for a site survey and subject to the expected receipt of regulatory consents and financing, the well-site survey operations are now expected to be carried out in Q3 2019 in advance of the Drilling Programme.

We continue to believe in the fundamental value of the Barryroe Field and, despite these delays, we shall continue our efforts to demonstrate and crystallise its value." 

Operational highlights

  • Barryroe Oil Field (SEL 1/11)
    In March 2018, Lansdowne, along with the Operator EXOLA (a 100% subsidiary of Providence Resources), signed a Farm-Out Agreement ("FOA") with APEC Energy Enterprises Limited ("APEC") for a multi-well Drilling Programme
    In September 2018, following the necessary government approvals, a binding FOA was signed and a 50% working interest was assigned to APEC
    The Updated FOA provided for us to be fully cost-carried for a programme comprising of the drilling and testing of four vertical wells and one horizontal side-track, plus the optional drilling of two further horizontal wells, together with cash advances to EXOLA for certain agreed project and operational costs totalling $19.5 million (since increased to $24 million)
    Under the FOA, APEC acquired a 50% working interest in SEL 1/11, with EXOLA retaining 40% and Lansdowne 10%
    During the year, extensive work was carried out on well planning
    Permission for the well site survey operations was granted in October 8, 2018 by the Minister, but this was subject to a legal challenge and the Barryroe partners decided not to act on this, but rather to submit a new application
  • Helvick Oil Field
    The Operator MFDEVCO continued evaluation work as required under the Farm-Out Agreement

Financial highlights 

  • Share Placing completed in April 2018 at 1.3p per share to raise £900,000 before costs
  • At the same time, LC Capital converted a substantial portion of its existing Loan, amounting to £680,000, into new shares, at the placing price
  • Brandon Hill Capital converted its entire existing Loan, amounting to £326,911, into new shares also at the placing price
  • In October 2018 and January 2019 Brandon Hill Capital exercised warrants in the Company, which resulted in an additional £85,000 in funding into the Company
  • Cash balances at 31 December 2018 of £0.16 million (2017: £0.02 million)
  • Operating expenses for the year of £0.2 million (2017: £0.2 million)
  • Loss for the year after tax of £0.3 million (2017: loss of £0.3 million)
  • Diluted loss per share of 0.05 pence (2017: loss of 0.1 pence) 

Corporate

  • In July 2018 Brandon Hill Capital Limited was appointed as Broker to the Company
  • Steve Lampe resigned from the Board in September 2018, but remains involved as a major shareholder and in an observer capacity at Board meetings
  • In November 2018 SP Angel was appointed as Nominated Adviser to the Company  

Post-balance sheet events

Operational

  • Barryroe Oil Field (SEL1/11)
    In February 2019, the COSL Innovator was nominated to carry out the Barryroe Drilling Programme
    Also in February 2019, a new application was submitted to conduct a site survey
    In April 2019, an application was submitted to convert SEL1/11 into a Lease Undertaking
    In June 2019, further amendments to the FOA were announced, with an increase in the loan advances to EXOLA from US$ 19.5 million to US$ 24 million to reflect an increase in the scope of work
    The Barryroe partners also agreed an extension for the receipt of the initial US$ 9 million payment to EXOLA to 5 July 2019
    Subject to receipt of regulatory consents and financing, the well-site survey operations are now expected to be carried out in Q3 2019

Financial

  • On 25 June 2019, the Company secured debt funding of £150,000 from LC Capital and £150,000 from Brandon Hill Capital Limited. With monthly overhead costs of circa £35,000, this is expected to provide sufficient working capital until progress is made on the aforementioned work programme
  • Also in June LC Capital Master Fund agreed to extend the repayment date of its outstanding loan of £1,046,000 to 31 December 2019. All other terms of the loan remain unchanged.
  • On 28 June 2019, SP Angel was appointed a Joint Broker to the Company, as well as continuing in its role as Nominated Adviser, alongside Lansdowne's existing broker - Brandon Hill Capital Limited

Notice of Annual General Meeting 

The Company will be holding its AGM at the offices of Pinsent Masons LLP, 30 Crown Place, Earl Street, London EC2A 4ES on 29th August 2019 at 12 noon. 

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