TIDMPVR
RNS Number : 6924Q
Providence Resources PLC
30 June 2022
Annual Results
Dublin and London - 30(th) June 2022
Providence Resources P.l.c (PVR), the Irish based energy
company, is pleased to announce the publication of its annual
report and accounts for the year ended 31(st) December 2021.
James Menton, Executive Chair, Providence Resources, said :
"Successful optimisation of the Barryroe Field presents a unique
opportunity to develop a critically important indigenous source of
oil and gas, to substitute part of the imports that will be needed
to meet ongoing demand during the energy transition. The Barryroe
Field has the potential to create significant employment
opportunities and provide strategic and fiscal value to the Irish
economy, at no cost to the Irish taxpayer.
The key barrier to progressing the project is the delay in
Ministerial consent for the Lease Undertaking, to permit us to
drill an appraisal well next year. Once we have the results of this
appraisal well, we are confident that our development plans can be
progressed rapidly and Barryroe can have a significant impact on
Ireland's security of energy supply over the next two decades. It's
an opportunity we cannot afford to squander as, in any scenario to
2050, there is still some level of demand for oil and gas through
the duration of the energy transition to Net Zero.
2021 OPERATIONAL AND FINANCIAL HIGHLIGHTS
Operational
-- Barryroe, North Celtic Sea (SEL 1/11)
o The exclusivity deal with SpotOn Energy was terminated in
April 2021,
o The new Board undertook a strategic review of the Barryroe
field,
o The K Site survey took place in Q3 2021 and was completed on
time and under budget,
o In December 2021, the Board announced its preliminary outcome
of the strategic review.
Financial
-- Operating loss for the period of EUR2.369 million versus EUR2.440 million in 2020,
-- Profit for the year EUR3.442 million versus loss of EUR10.358
million in 2020. The profit figure for the year was impacted by the
fair value gain in warrants of EUR5.643m (2020: EUR7.581m
loss),
-- Basic profit per share of 0.36 cents versus loss of 1.31 cents in 2020,
-- Diluted profit per share of 0.30 cents versus loss of 0.91 in 2020,
-- At 31 December 2021, total cash and cash equivalents were
EUR1.923 million versus EUR2.110 million in 2020,
-- The Company has no bank or bond debt as at 31 December 2021,
-- As part of the fundraising in May 2020, the company issued
one share, one GBP0.03 warrant and one GBP0.09 warrant. There were
86,061,529 of the GBP0.03 warrants exercised in 2021 raising c.
EUR2.9m. The remaining GBP0.03 warrants expired on the 6 May 2021.
No GBP0.09 warrants were exercised and they expired on the 6 May
2022.
2021 IN REVIEW
Board Changes
During 2021, there were a number of changes at Board level. The
Chairman, Pat Plunkett, resigned his position in July, at which
time James Menton was appointed Chairman. Ann-Marie O'Sullivan and
Peter Newman joined the Board in July 2021, bringing a wealth of
industry and strategic communications experience to the Board. In
October, Alan Linn resigned from his position as Chief Executive
and, pending the recruitment of a successor, James Menton
temporarily took on executive responsibilities.
Strategy
Since its formation in July 2021, the new Board has adopted a
realistic and pragmatic approach to the formulation of its Barryroe
Strategy. The Board has given careful regard to the dynamics of the
current regulatory environment and the energy transition issues of
security of supply, growing energy demand and the continuing need
to attract foreign direct investment as Ireland moves towards
carbon neutrality by 2050. From early August 2021, the Board
immediately reassessed its key objectives and priorities. The
initial and continuing priorities are as follows:
-- Follow-up and engagement with the GeoScience Regulation
Office (GSRO) in relation to the application for the Lease
Undertaking.
-- Ensuring that the Company has the breadth and depth of
experience, competency and skills within the technical team to
support the Board in the formulation and delivery of the Barryroe
Strategy.
-- Enhancing the understanding of the Barryroe Project and the
opportunities it presents for shareholders and all other key
stakeholders.
The Barryroe Lease Undertaking - Status
The granting of the Barryroe Lease Undertaking by Minister Eamon
Ryan is fundamental to the execution of the Board's strategy.
Securing the Lease Undertaking has been, and continues to be, the
Board's main focus.
Since August 2021, the Board has engaged proactively with the
GeoScience Regulation Office (GSRO) and has written on a number of
occasions to Minister Eamon Ryan, asking him to grant the Lease
Undertaking as a matter of urgency. The Board has also engaged with
a number of other key stakeholders, including public
representatives, in order to move the DECC/GSRO review process
forward. Despite a number of attempts to engage directly with
Minister Ryan and other members of the Government, a decision on
the Lease Undertaking is still outstanding.
In the Board's view, there is no justification for this ongoing
delay, as it believes that all required technical and financial
information in relation to the Barryroe Lease Undertaking has been
submitted to the GSRO. The Board believes that Minister Ryan's
delay in progressing the application represents a clear missed
opportunity to help to ensure Ireland's energy security. The Board
is confident that the Barryroe Field offers a highly valuable
resource that, at no cost to the State, could contribute to:
-- Ireland's energy security over the next decade.
-- Ireland's energy transition to a carbon neutral economy.
-- carbon reduction through import substitution.
-- significant job creation and tax contributions.
Irish Government Policy and Barryroe
In September 2019, the Irish Government affirmed that all
existing licences, which included Barryroe, would be allowed to run
their full term. It should be firmly understood that Barryroe is a
discovered oil and gas field, not a wildcat prospect, in relatively
shallow waters not far off the coast of Cork. It requires an
appraisal well to be drilled to confirm the reservoir and
hydrocarbon characteristics before a phased development can be
initiated. That well can be progressed only once the Lease
Undertaking is issued. It is our view that the potential offered by
the successful exploitation of the Barryroe Field would be an
important element in the execution of Government policy, as
enunciated by the Department of the Environment, Climate and
Communications' "Policy Statement on Security of Electricity
Supply" (November 2021) and Section 3.7 of the "National Risk
Assessment 2021/2022 - Overview of Strategic Risk".
As a bloc, the EU is desperately scrambling for options to move
away from its dependence on Russian oil and gas and maintain future
energy security. In Ireland, we don't need to go through the
process of locating further oil and gas fields that the UK and
Norway are now planning to undertake. We already have a discovery
in Barryroe, however, until the Minister approves the Lease
Undertaking, our near-term energy security is substantially in the
hands of other countries.
Current Government policy does not restrict Ireland's use of
hydrocarbon fuels; it merely precludes new searches for more of
them in our own waters. The Board believe that the Irish
Government's delay in allowing progress on its existing oil and gas
licences, given the current energy security pressures, adds
unnecessarily to the risk of energy shortages.
The Case for Barryroe
Geopolitical Challenges
The war in Ukraine has re-emphasised the value of national
self-sufficiency across the whole range of primary energy sources.
As Ireland moves towards a much bigger share of renewable sources
through the transition to 2050, there will be an ongoing, albeit
diminishing, level of residual demand for oil and gas to meet
Ireland's energy consumption needs. The impact of rising imported
energy prices and the growing potential for significant
interruption to imported energy supplies is currently a key focus
for all Governments throughout Europe.
Energy Security and Vulnerability
The Economic and Social Research Institute (ESRI) recently
ranked Ireland as the fourth-most energy insecure country in
Europe. Currently, Ireland imports 70% of its gas needs through two
interconnectors running from Scotland to Ireland. The remaining 30%
comes from the Corrib Field, which will be depleted by the end of
the decade.
Ireland's reliance on the UK for our energy needs puts the
country in an extremely vulnerable position and is totally
unsustainable. Following Brexit, Ireland is no longer compliant
with the EU's requirements for energy security according to the
Commission for Regulation of Utilities (CRU). Ireland's gas import
infrastructure currently runs through a "third country", and there
is no legal obligation on the UK to consider Ireland's energy needs
in the event of significant disruption. The irony is that Ireland
has a unique opportunity to harness its own supply of oil and gas
by optimising the Barryroe Field. Not to do so would, in the
Board's view, have a detrimental impact on Ireland's energy
transition and would represent a very significant missed
opportunity from a strategic, fiscal and energy security
perspective.
Energy Transition - The Need for Barryroe
Ireland has a clear goal of being carbon neutral by 2050 and we
acknowledge that expanding renewable sources of energy must be the
main focus in the years ahead. However, most of our transport
options, including cars, vans and airplanes, run on oil and
transitioning completely away from oil will not happen
overnight. In reality, Ireland's commitment to achieving
net-zero carbon emissions by 2050 cannot be achieved without
realistic transition planning. Successful exploitation of the
Barryroe Field, in conjunction with industry and government, can
contribute significantly to meeting Ireland's energy demand during
the transition over the coming decades without prejudicing
achievement of a carbon neutral economy in Ireland.
Environmental Benefits - Carbon Reduction Through Import
Substitution
The benefits of indigenous sources of energy are significant.
For example, gas produced in Ireland and in Europe results in up to
30% less carbon emissions than gas from outside Europe. This is due
to a combination of more efficient production technologies and less
energy expended due to shorter pipeline transport (given that long
distance pipeline transport requires pumping booster stations).
Technical Strategy
The Board recognised the need to engage a team of experts to
lead on the development of a technical strategy. In the wake of the
failed "SpotOn" farm out, and the resumption of the Company's
direct management of the Barryroe project, the Board evaluated
Providence Resources' technical approach and expertise. The Board
appointed NRG Well Management International Ltd (NRG) to lead the
recruitment and organisation of an expanded technical team. The
team completed four major studies to underpin the technical
strategy, in particular an updated Competent Persons Report (CPR),
commissioned from RPS Energy Consultants (RPS), which was completed
at the beginning of February 2022.
The new report confirms 81.2 MMstb of Gross 2C oil resources
that can be accessed through an initial two-phase development
project, addressing one reservoir in the central segments of the
Field only, those closest to the 2012 oil discovery well. The CPR,
which remains consistent with the 2013 whole field assessment,
confirmed a Net Present Value (NPV) of $401m to Providence
Resources' interest in this initial project only, based on a 10%
discount factor and a $70 Brent oil price. The phased project
is
predicated on an initial appraisal well to confirm the reservoir
and hydrocarbon phase characteristics in the key Basal Wealden A
Sands. The initial project is also anticipated to advance the
potential for further development of other Barryroe reservoirs,
including those holding its discovered gas resources.
The technical strategy for the Barryroe Field is ready to be
implemented within a short timeframe. Subject to Ministerial
consent for the Lease Undertaking, the Board has decided to proceed
with an appraisal well in 2023. In expectation of a satisfactory
outcome, the Board intends to proceed to a phased development
leading to first production in 2026. The Company urgently requires
a positive decision on the Lease Undertaking by Minister Eamon Ryan
in order to ensure that the Barryroe Field can play a key role in
Ireland's energy future.
Share Placing - June 2022
In June 2022, the Company raised gross proceeds of $1.8 million
(equivalent to approximately STGGBP1.5 million) through the
subscription for 45,312,316 Placing Securities and 51,686,693
Subscription Securities (each of which shall comprise one New
Ordinary Share and one STG1.5p Warrant). The allotment and issue of
the Warrants is subject to and conditional upon the passing of
certain resolutions in relation to the Warrants at the AGM by the
requisite number of shareholders as required pursuant to the
Companies Act. Together with existing resources, this additional
funding is sufficient to meet the anticipated working capital
requirements of the Group for at least the next 12 months.
Name Change - Barryroe Offshore Energy
The Company is proposing to change its name to Barryroe Offshore
Energy, which will be subject to a shareholder's resolution at the
AGM. The new name reflects the Board's ongoing and continuing focus
on the Barryroe Field, as we look forward to a positive outcome
from the appraisal campaign.
The Future
The Board is keenly aware of the global climate crisis, which
has been exacerbated by an energy crisis as a result of the war in
Ukraine. The impact of rising energy prices, and the potential for
significant interruption to energy supplies, is a focus for
governments throughout Europe. The challenges we face are stark and
any disruption to energy supplies will lead to catastrophic
economic and social impacts. The prospect of rolling blackouts
and/or energy rationing would also threaten Ireland's ability to
attract
ongoing foreign direct investment.
It is a strategic imperative that Irish Government policy allows
for a balance between ideology and pragmatism with regard to energy
policy. Ireland is now at a critical juncture in planning for its
energy future and all agree that we will continue to require oil
and gas to supplement available renewable sources for decades to
come.
Annual Report and 2022 Annual General Meeting
The Company's Annual Report and Accounts for the year ended
31(st) December 2021 will be posted later today to shareholders,
together with the notice of the 2022 Annual General Meeting. These
will also be available on the Company's website:
www.providenceresources.com
Investor Enquiries:
o Providence Resources P.l.c. Tel: 353 1 219 4074
James Menton
Executive Chair
Investor Relations Tel: 353 87 6620234
Job Langbroek
o J & E Davy Tel: 353 1 679 6363
Anthony Farrell
Media Enquiries:
o AM O'Sullivan PR Tel: 353 87 9881890 /
tina@amosullivanpr.ie
Tina Quinn
PROVIDENCE RESOURCES Plc
Condensed consolidated income statement
for the year ended 31(st) December 2021
Notes
Year ended Year ended
31 December 31 December
2021 2020
Audited Audited
EUR'000 EUR'000
Continuing operations
------ -------------- --------------
Administration expenses 2 (2,369) (2,163)
------ -------------- --------------
Pre-licence expenditure - (5)
------ -------------- --------------
Impairment of exploration
and evaluation assets - (272)
------ -------------- --------------
Operating loss 1 (2,369) (2,440)
------ -------------- --------------
Finance income 3 6,699 361
------ -------------- --------------
Finance expense 4 (888) (8,279)
------ -------------- --------------
Profit/(loss) before income
tax 3,442 (10,358)
------ -------------- --------------
Income tax expense - -
------ -------------- --------------
Profit/(loss) for the financial
year 3,442 (10,358)
------ -------------- --------------
Profit/(loss) per share
(cent)
------ -------------- --------------
Basic profit/(loss) per
share 8 0.36 (1.31)
------ -------------- --------------
Profit/(loss) per share
(cent)
------ -------------- --------------
Diluted profit/(loss) per
share 8 0.30 (0.91)
------ -------------- --------------
The total profit/(loss) for the year is entirely attributable to
equity holders of the Company.
PROVIDENCE RESOURCES Plc
Condensed consolidated statement of comprehensive income
for the year ended 31 December 2021
Notes Year ended Year ended
31 December 31 December
2021 2020
Audited Audited
EUR'000 EUR'000
Profit/(loss) for the financial
year 3,442 (10,358)
------ ------------- -------------
Other comprehensive income
------ ------------- -------------
Items that may be reclassified
into profit and loss:
------ ------------- -------------
Foreign exchange translation gains/(losses) 4 4,982 (5,453)
------ ------------- -------------
Total comprehensive income/(expense)
for the year 8,424 (15,811)
------ ------------- -------------
The total comprehensive income/(expense) for the year is
entirely attributable to equity holders of the Company.
PROVIDENCE RESOURCES Plc
Condensed consolidated statement of financial position
as at 31 December 2021
Notes 31 December 31 December
2021 2020
Audited Audited
EUR'000 EUR'000
Assets
------ ------------ ------------
Exploration and evaluation
assets 5 66,983 60,425
------ ------------ ------------
Property, plant and equipment 1 13
------ ------------ ------------
Total non -current assets 66,984 60,438
------ ------------ ------------
_______ _______
------ ------------ ------------
Trade and other receivables 388 223
------ ------------ ------------
Cash and cash equivalents 1,923 2,110
------ ------------ ------------
Total current assets 2,311 2,333
------ ------------ ------------
_______ _______
------ ------------ ------------
Total assets 69,295 62,771
------ ------------ ------------
Equity
------ ------------ ------------
Share capital 6 71,829 71,743
------ ------------ ------------
Share premium 6 260,272 256,773
------ ------------ ------------
Undenominated capital 623 623
------ ------------ ------------
Foreign currency translation
reserve 9,616 4,634
------ ------------ ------------
Share based payment reserve 767 806
------ ------------ ------------
Accumulated losses (281,370) (285,189)
------ ------------ ------------
Total equity attributable
to equity holders of
the Group 61,737 49,390
------ ------------ ------------
Liabilities
------ ------------ ------------
Decommissioning provision 7 6,056 5,853
------ ------------ ------------
Warrant liabilities 9 - 3,555
------ ------------ ------------
Total non-current liabilities 6,056 9,408
------ ------------ ------------
Trade and other payables 1,042 815
------ ------------ ------------
Warrant liabilities 9 460 3,158
------ ------------ ------------
Total current liabilities 1,502 3,973
------ ------------ ------------
Total liabilities 7,558 13,381
------ ------------ ------------
Total equity and liabilities 69,295 62,771
------ ------------ ------------
PROVIDENCE RESOURCES Plc
Condensed consolidated statement of changes in Equity
for the year ended 31 December 2021
Foreign Share
Currency Based
Share Undenominated Share Translation Payment Accumulated
Capital Capital Premium Reserve Reserve losses Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 January
2020 71,512 623 251,300 10,087 642 (274,898) 59,266
--------- -------------- --------- ------------- --------- ------------ ---------
Total comprehensive
expense
--------- -------------- --------- ------------- --------- ------------ ---------
Loss for financial
year - - - - - (10,358) (10,358)
--------- -------------- --------- ------------- --------- ------------ ---------
Foreign currency
translation - - - (5,453) - - (5,453)
--------- -------------- --------- ------------- --------- ------------ ---------
Total comprehensive
expense - - - (5,453) - (10,358) (15,811)
--------- -------------- --------- ------------- --------- ------------ ---------
Transactions
with owners, recorded
directly in equity
--------- -------------- --------- ------------- --------- ------------ ---------
Share based payments
expense - - - - 448 - 448
--------- -------------- --------- ------------- --------- ------------ ---------
Share options
lapsed in year - - - - (284) 284 -
--------- -------------- --------- ------------- --------- ------------ ---------
Shares issued
in year 231 - 5,473 - - (217) 5,487
--------- -------------- --------- ------------- --------- ------------ ---------
Total transactions
with owners, recorded
directly in equity 231 - 5,473 - 164 67 5,935
--------- -------------- --------- ------------- --------- ------------ ---------
At 31 December
2020 71,743 623 256,773 4,634 806 (285,189) 49,390
--------- -------------- --------- ------------- --------- ------------ ---------
At 1 January
2021 71,743 623 256,773 4,634 806 (285,189) 49,390
--------- -------------- --------- ------------- --------- ------------ ---------
Total comprehensive
income
--------- -------------- --------- ------------- --------- ------------ ---------
Profit for financial
year - - - - - 3,442 3,442
--------- -------------- --------- ------------- --------- ------------ ---------
Foreign currency
translation - - - 4,982 - - 4,982
--------- -------------- --------- ------------- --------- ------------ ---------
Total comprehensive
income - - - 4,982 - 3,442 8,424
--------- -------------- --------- ------------- --------- ------------ ---------
Transactions
with owners, recorded
directly in equity
--------- -------------- --------- ------------- --------- ------------ ---------
Share based payments
expense - - - - 338 - 338
--------- -------------- --------- ------------- --------- ------------ ---------
Share options
lapsed in year - - - - (377) 377 -
--------- -------------- --------- ------------- --------- ------------ ---------
Shares issued
in year 86 - 3,499 - - - 3,585
--------- -------------- --------- ------------- --------- ------------ ---------
Total transactions
with owners, recorded
directly in equity 86 - 3,499 - (39) 377 3,923
--------- -------------- --------- ------------- --------- ------------ ---------
At 31 December
2021 71,829 623 260,272 9,616 767 (281,370) 61,737
--------- -------------- --------- ------------- --------- ------------ ---------
PROVIDENCE RESOURCES Plc
Condensed consolidated statement of cash flows
for the year ended 31 December 2021
Year ended Year ended
31 December 31 December
2021 2020
Audited Audited
------------- -------------
EUR'000 EUR'000
------------- -------------
Cash flows from operating activities
------------- -------------
Profit/(loss) after tax for year 3,442 (10,358)
------------- -------------
Adjustments for:
------------- -------------
Depreciation 15 24
------------- -------------
Impairment of exploration and evaluation
assets - 272
------------- -------------
Finance income (6,699) (361)
------------- -------------
Finance expense 888 8,279
------------- -------------
Share based payment charge 338 448
------------- -------------
Foreign exchange (16) 21
------------- -------------
Change in trade and other receivables (165) 175
------------- -------------
Change in trade and other payables 227 (700)
------------- -------------
Net cash outflow from operating activities (1,970) (2,200)
------------- -------------
Cash flows from investing activities:
------------- -------------
Interest received - 1
------------- -------------
Acquisition of exploration and evaluation
assets (1,492) (902)
------------- -------------
Cash calls in respect of exploration
and evaluation assets 262 57
------------- -------------
Acquisition of property, plant and equipment (2) (1)
------------- -------------
Net cash used in investing activities (1,232) (845)
------------- -------------
Proceeds from issue of security instruments 2,974 4,836
------------- -------------
Issue costs - (349)
------------- -------------
Net cash from financing activities 2,974 4,487
------------- -------------
Net (decrease)/increase in cash and
cash equivalents (228) 1,442
------------- -------------
Cash and cash equivalents at beginning
of year 2,110 710
------------- -------------
Effect of exchange rate fluctuations
on cash and cash equivalents 41 (42)
------------- -------------
Cash and cash equivalents at end of
year 1,923 2,110
------------- -------------
PROVIDENCE RESOURCES Plc
Note 1
Reporting entity
Providence Resources Plc ("the Company") is a company domiciled
in Ireland. The registered number of the Company is 268662 and the
address of its registered office is Paramount Court, Corrig Road,
Sandyford Business Park, Dublin 18, D18 R9C7.
Basis of preparation
The consolidated preliminary financial results announcement of
the Company, for the year ended 31 December 2021 comprises of the
Company and its subsidiaries (together referred to as the
"Group").
The financial information included in this consolidated
preliminary financial results announcement has been extracted from
the Group's Financial Statements for the year ended 31 December
2021 and is prepared based on the accounting policies set out
therein, which are consistent with those applied in the prior year
with the exception of the effect of the new accounting standards
listed below. As permitted by European Union (EU) law and in
accordance with AIM and Euronext Growth Market rules, the Group
Financial Statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) and their
interpretations issued by the International Accounting Standards
Board (IASB) as adopted by the EU.
The financial information prepared in accordance with IFRSs as
adopted by the EU included in this report does not include all the
information and disclosures required in the full statutory
financial statements. The Group Financial Statements will be filed
with the Company's annual return in the Companies Registration
Office and circulated to shareholders in due course.
The information included has been derived from the Group
Financial Statements which were approved by the Board of Directors
on 23 June 2022. The auditors have reported on the financial
statements for the year ended 31 December 2021 and their report was
unqualified and contains a "material uncertainty related to going
concern" paragraph (see going concern note below for further
details). The financial information for the year ended 31 December
2020 represents an abbreviated version of the Group's statutory
financial statements on which an unqualified audit report was
issued and which have been filed with the Companies Registration
Office. The financial information is presented in Euro, rounded to
the nearest thousand where applicable.
The preparation of the condensed consolidated preliminary
financial information requires management to make judgements,
estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and
expenses. Actual results could differ materially from these
estimates. In preparing this financial information, the significant
judgements made by management in applying the Company's accounting
policies and the key sources of estimation uncertainty are the same
as those that applied to the consolidated financial statements as
at and for the year ended 31 December 2020, except as noted below
.
Changes in significant accounting policies
New and Amended Standards and Interpretations effective during
2021
New and amended standards and interpretations
The following new standards and amendments were adopted by the
Group for the first time in the current financial reporting period
with no resulting impact to the consolidated financial
statements:
-- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
Interest Rate Benchmark Reform - Phase 2.
PROVIDENCE RESOURCES Plc
Note 1 (continued)
New and amended standards and interpretations (continued)
-- Amendments to IFRS 16, COVID-19 Related Rent Concessions
beyond 30 June 2021;
-- Amendments to IFRS 4 Insurance Contracts - deferral of
effective date of IFRS 9;
Forthcoming requirements
A number of new standards, amendments to standards and
interpretations issued are not yet effective and have not been
applied in preparing these financial statements. These new
standards, amendments to standards and interpretations are not
expected to have a material impact on the Group's financial
statements as the Group has no transactions that would be affected
by these new standards and amendments.
The principal new standards, amendments to standards and
interpretations are as follows:
-- Amendments to IAS 1 Classification of Liabilities as Current
or Non-current;
-- Amendments to IFRS 17, Insurance contracts: Initial
application of IFRS 17 and IFRS 9;
-- Amendments to IAS 1 and IFRS Practice Statement 2, Disclosure
of Accounting Policies;
-- Amendments to IAS 8, Definition of Accounting Estimates;
-- Amendments to IAS 12, Deferred Tax related to Assets and
Liabilities arising from a single transaction;
-- Amendments to IFRS 10 and IAS 28, Sale of contribution of
Assets between an investor and its Associate or Joint Venture.
New and Amended Standards and Interpretations Issued but not yet
Effective or Early Adopted
A number of new standards and interpretations have been issued
but are not yet effective for the Group. These standards are either
not expected to have a material effect on the Consolidated
Financial Statements or they are not currently relevant for the
Group.
Warrants
The warrants liability amounts to EUR0.460 million at 31
December 2021 (2020: EUR6.713 million). The warrant liability is
due to the warrants being issued in GBP while the functional
currency of the Parent Company was EUR.
The warrants were issued as part of the share placing in May
2020. There were two sets of warrants attached to each share. The
duration for the GBP0.03 was one year and for the GBP0.09 was two
years. The GBP0.03 warrants expired on 6 May 2021. At 31 December
2021, the warrants valuation amount to EUR0.46m and represents
management's best estimates of the liability for the GBP0.09
warrants. The key estimate in the valuation of warrants is the
volatility rate applied. The period of 18 months was used for the
volatility calculation for the GBP0.09 warrants which expired on 6
May 2022. The 4-month period for the GBP0.09 warrants was
determined by management as too short and would distort the
volatility calculation as it is a key component when calculating
the fair value using Black Scholes; see note 19. The fair value
movement of the warrants is recognised in the income statement as
either finance income or finance expense, depending on the
movement.
Going concern
The Directors have prepared the financial statements on a going
concern basis, which assumes that Group and Company will continue
in operational existence for at least twelve months from the date
of the approval of these financial statements.
At 31 December 2021, the Group had net assets of EUR61.737m,
including cash on hand of EUR1.923m, having recorded a net cash
outflow of EUR0.228m during the year. Having no source of operating
revenues, in June 2022, the Company raised gross proceeds of $1.8
million (equivalent to approximately STGGBP1.5 million) through the
subscription for 45,312,316 Placing Securities and 51,686,693
Subscription Securities (each of which shall comprise one New
Ordinary Share and one STG1.5p Warrant) (note 12), demonstrating
again the ongoing support of shareholders. Together with existing
resources, this additional funding is sufficient to meet the
anticipated working capital requirements of the Group for at least
the next 12 months.
PROVIDENCE RESOURCES Plc
Note 1 (continued)
Going concern (continued)
In April 2021, the Group applied for a Lease Undertaking for the
Barryroe Joint Venture, as the follow-on permit from the Standard
Exploration Licence, SEL 1/11, which expired in July 2021. The
proposed work programme centres on drilling an appraisal well,
targeted for completion in 2023. The Directors note that the Irish
Government has stated that all existing licences will be allowed to
run their full life cycle. The Group has fulfilled all obligations
relating to SEL 1/11 and the Directors believe the Barryroe Joint
Venture has complied with all the requirements for Government
approval of the Lease Undertaking, which would be backdated to run
for upto four years from July 2021. Notwithstanding the delay thus
far in securing Government consent, the Directors continue to
expect that this next phase of the Barryroe Licence, and the
associated proposed work programme, will finally receive approval
in the coming months.
The work programme proposed under the Lease Undertaking, if
granted, entails significant capital expenditure by the Barryroe
Joint Venture. Consequently, prior to the letting of major
commercial contracts for the appraisal well and related studies,
the Directors have considered the Group's options available to fund
its expenditure commitments, both current and contingent upon
securing the Lease Undertaking. In particular, upon confirmation of
approval of the Lease Undertaking, the Directors expect to raise
substantial additional equity funding to meet the Group's share of
the related obligations.
The Directors have carefully considered the current financial
position of the Group and have prepared cash flow forecasts for the
period to 30 June 2023, being the 12-month period from the date of
approval of these financial statements. They note that the main
risk factors in these forecasts are the granting of the Barryroe
Lease Undertaking on acceptable terms and conditions and the
completion of an appropriate further equity funding round during
the period. Based on their consideration of the Group's cash flow
forecasts, and the underlying assumptions, the Directors are
satisfied that the Group will have access to sufficient funds to
cover its working capital and capital expenditure expected over
this 12-month period.
The Directors have considered the matters set out above and
determined that the outstanding Government consent to the Barryroe
Lease Undertaking and the requirement, contingent thereon, to
secure additional funding to pursue the related Barryroe appraisal
work programme in the next 12 months, constitute material
uncertainties that may cast significant doubt upon the Group's and
Company's ability to continue as a going concern. Should the Lease
Undertaking not be approved, or appropriate additional funding not
then be secured, the Directors note that the Group and Company may
be unable to realise its assets and discharge its liabilities in
the normal course of business.
Nevertheless, after making enquiries and considering the
uncertainties described above, the Directors have a reasonable
expectation that the Group and Company will have adequate resources
to continue in operational existence for the foreseeable future.
The Directors expect that the Barryroe Lease Undertaking will be
approved and, noting that the Group and Company has continued to
have ongoing support from shareholders, that an appropriate further
fundraising will be successful. For these reasons, the Directors
have adopted the going concern basis in preparing these annual
financial statements, which do not include any adjustments that
would be necessary if this basis were inappropriate.
Operating segments
All exploration and evaluation assets held by the Group are
located in the Republic of Ireland and, accordingly, the Group has
identified one reporting segment, being:
Republic of Ireland exploration assets: oil and gas exploration
assets in the Republic of Ireland.
PROVIDENCE RESOURCES Plc
Note 2
Administration expenses
Year ended Year ended
31 December 31 December
2021 2020
Audited Audited
------------- -------------
EUR'000 EUR'000
------------- -------------
Corporate, exploration and development
expenses 2,385 2,142
------------- -------------
Foreign exchange gain (16) 21
------------- -------------
Total administration expenses for
the year 2,369 2,163
------------- -------------
Note 3
Finance Income
Year ended Year ended
31 December 31 December
2021 2020
Audited Audited
------------- -------------
EUR'000 EUR'000
------------- -------------
Bank deposit interest income - 1
------------- -------------
Gain in fair value of warrants (note 5,643 -
9)
------------- -------------
Redetermination of decommissioning 1,056 -
provision (note 7)
------------- -------------
Foreign exchange in decommissioning
provision (note 7) - 360
------------- -------------
Total finance income recognised
in income statement 6,699 361
------------- -------------
Note 4
Finance Expense
Year ended Year ended
31 December 31 December
2021 2020
Audited Audited
------------- -------------
EUR'000 EUR'000
------------- -------------
Unwind of discount on decommissioning
provision (note 7) 593 565
------------- -------------
Foreign exchange loss on decommissioning 294 -
provision (note 7)
------------- -------------
Interest on right to use asset 1 1
------------- -------------
Issue costs associated with the
warrants - 132
------------- -------------
Loss in fair value of warrants (note
9) - 7,581
------------- -------------
Total finance expense recognised
in income statement 888 8,279
------------- -------------
PROVIDENCE RESOURCES Plc
Note 5
Exploration and evaluation asset
EUR'000
Cost and net book value
--------
At 1 January 2020 65,377
--------
Additions 902
--------
Cash call amounts received in year (57)
--------
Impairment charge (272)
--------
Foreign exchange translation (5,525)
--------
At 31 December 2020 60,425
--------
Additions 1,492
--------
Cash call amounts received in year (262)
--------
Decommissioning redetermination 287
--------
Foreign exchange translation 5,041
--------
At 31 December 2021 66,983
--------
The exploration and evaluation asset balance at 31 December 2021
relates to the Barryroe asset.
The directors assessed all activities ongoing within exploration
and evaluation assets and determined that no impairment charge
(2020: EUR0.27 million charge) was required at 31 December
2021.
The directors recognise that the future realisation of the
Barryroe asset is dependent on the granting of the lease
undertaking which is subject to government approval, future
successful appraisal activities and the subsequent economic
production of hydrocarbons.
Note 6
Share Capital and Share Premium
Number
('000) EUR'000
Authorised
Deferred shares of EUR0.011 each (a)
at beginning of year 9,994,066 109,385
Deferred shares of EUR0.011 each (a)
each at end of year 9,944,066 109,385
Ordinary shares of EUR0.001 each at
beginning of year 1,800,000 1,800
Ordinary shares of EUR0.001 each at
end of year 1,800,000 1,800
(a) The deferred shares do not entitle the shareholder to
receive a dividend or other distribution, do not entitle the
shareholder to receive notice of or vote at any general meeting of
the Company, and do not entitle the shareholder to any proceeds on
a return of capital or winding up of the Company.
PROVIDENCE RESOURCES Plc
Note 6
Share Capital and Share Premium (continued)
Share Share
Number capital premium
Issued 000's EUR'000 EUR'000
---------------------------------------- ----------- -------------- ---------
Deferred Shares of EUR0.011 each
At 31 December 2020 6,441,373 70,854 5,691
---------------------------------------- ----------- -------------- ---------
At 31 December 2021 6,441,373 70,854 5,691
---------------------------------------- ----------- -------------- ---------
Ordinary Shares of EUR0.001 each
At 31 December 2020 888,803 889 251,082
---------------------------------------- ----------- -------------- ---------
Shares issued during the year - - -
Warrants exercised in year 86,061 86 3,499
---------------------------------------- ----------- -------------- ---------
At 31 December 2021 (Ordinary shares of
EUR0.001) 974,864 975 254,581
---------------------------------------- ----------- -------------- ---------
At 31 December 2021 (Total deferred and
ordinary shares) 7,416,237 71,829 260,272
---------------------------------------- ----------- -------------- ---------
On 5 May 2020, the Company issued 177,973,004 ordinary shares as
part of a placing and subscription agreement which raised c.EUR3.1m
before expenses. Each security instrument comprised one ordinary
share of EUR0.001, one GBP0.03 warrant and one GBP0.09 warrant.
On issuance, a fair value of EUR1.9m was attributed to the
ordinary shares (share capital/share premium outlined above) and
EUR1.2m to the Warrant instruments based on the effective share
price at that date. In line with the Group's accounting policies
these Warrants are presented as financial liabilities. The holder
of each warrant could exercise its rights under the instrument
which allowed that holder to convert the warrant into one ordinary
share, with a par amount of EUR0.001, by payment of the exercise
price of GBP0.03 or GBP0.09, as applicable. The warrants are
non-transferrable.
On 28 May 2020, the company issued 6,116,208 Ordinary shares
through a subscription agreement which raised approx. EUR0.2m.
During 2020, 47,288,814 GBP0.03 warrants were exercised. The fair
value of these exercised warrants was EUR2.021m.
The share capital and share premium total increase of EUR5.7m in
2020 comprised:
-- EUR1.9m on 5 May from the placing of shares;
-- EUR0.2m on the 28 May 2020 from the additional subscription;
-- EUR1.557m being cash received upon the exercise of warrants; and
-- EUR2.021m being the fair value of the warrants exercised.
During 2021, there were 86,061,529 GBP0.03 warrants exercised
which raised approx. EUR2.974m. The remaining 44,622,661 GBP0.03
warrants expired on the 6 May 2021. No GBP0.09 warrants have been
exercised and the GBP0.09 warrants expired on 6 May 2022.
The fair value of the GBP0.03 warrants that were exercised was
recalculated at the time exercise. The fair value of 86,061,529
warrants of GBP0.03 exercised was calculated as EUR0.610m. This
fair value is added to the actual cash raised of EUR2.974m to give
a total increase in share capital and share premium of
EUR3.585m.
PROVIDENCE RESOURCES Plc
Note 7
Decommissioning provisions
2021 2020
EUR'000 EUR'000
At beginning of year 5,853 5,733
Unwinding of discount 593 565
Foreign exchange (gain)/loss 294 (360)
Redetermination of decommissioning
provision (769)
Translation adjustment 85 (85)
At end of year 6,056 5,853
During 2021, the Board undertook a strategic review of Barryroe.
The outcome of this is that an appraisal well is planned to be
drilled in 2023 preparatory to a phased development, with first oil
production expected by the end of 2026 subject to Ministerial
approval.
The Group anticipates that a decommissioning programme for other
licence areas (since relinquished) will be undertaken at the same
time as the Group's Barryroe wells, subject to regulatory consent
and approval. Accordingly, all decommissioning is projected to take
place in 2047.
The decommissioning provision is made up of a total of six
wells. Five of the wells are held in the Parent Company, Providence
Resources Plc, making up EUR4.633m of the decommissioning provision
while the remaining well is held in Exola DAC for which the
decommissioning provision is EUR1.423m.
The decommissioning provision has been calculated assuming
industry established oilfield decommissioning techniques and
technology at current prices, based on external expert reports
where available and is discounted at 1.3% (2020: 10%) per annum,
reflecting the associated risk profile.
The Group undertook a review of the discount rate applied to the
projected costs to derive the net present value. The Board used the
20-year Irish Government Bond rates of 1.30% as an appropriate
discount rate. In relation to cost inflation, experience over the
last decade indicates that advances in technology and operations in
the decommissioning of wells, suggests that cost inflation may
reasonably be expected to be offset by gains in efficiency so the
net effective cost inflation rate used was zero.
As a result of the updated calculation, there was a net EUR0.769
million adjustment to the decommissioning provision at the end of
2021. EUR1.056 million credit was adjusted through the Parent
Company. The offset to this figure was registered in the income
statement as finance income. The remaining sum of EUR0.287 million
charge related to the Barryroe well and was capitalised in the
Exploration and Evaluation assets.
PROVIDENCE RESOURCES Plc
Note 8
Earnings per share
Earnings per share are calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year.
Total Total
2021 2020
EUR'000 EUR'000
Profit/(loss) attributable to equity
holders of the Company 3,442 (10,358)
The weighted average number of ordinary 2021 2020
shares in issue
is calculated as follows:
In issue at beginning of year ('000s) 888,803 657,425
Adjustment for shares issued in year 58,520 130,519
Weighted average number of ordinary
shares ('000s) 947,323 787,944
cent cent
Basic profit/(loss) per share (cent) 0.36 (1.31)
The weighted average number of ordinary
shares
for diluted earnings per share calculated
as follows:
Dilutive share options 39,683 37,850
Dilutive warrants 177,973 308,657
Basic weighted average number of shares
in issue during
the year 947,323 787,944
Weighted average number of ordinary
share 1,164,979 1,134,451
Diluted profit/(loss) per share (cent) 0.30 (0.91)
There is a difference between the basic profit per ordinary
share and the diluted profit per ordinary share for the current
year. However, for the prior year all potentially dilutive ordinary
shares outstanding are anti-dilutive in relation to continuing
operations. There were 39,683,000 (2020: 37,850,000) anti-dilutive
share options in issue at 31 December 2021. There were 177,973,004
(2020: 308,657,194) anti-dilutive warrants.
PROVIDENCE RESOURCES Plc
Note 9
Share options and warrants
The Group operates employee share schemes as follows:
2009 Scheme
In 2009, the directors adopted a share option scheme which
contains share growth performance criteria. The option price is the
market price immediately preceding the date of grant. The "2009
scheme" operates as an equity-settled share option scheme and the
options are granted subject to the following conditions:
(i) 50% of total options granted are exercisable after one year
from the date of grant provided that the market price of the
Company's shares has increased by a minimum of 25% and has
maintained such increase over a period of three months prior to the
exercise of any option.
(ii) The remaining 50% of the total options granted are
exercisable after two years from the grant date provided the market
price of the Company's shares has increased by a minimum of 50%
from date of grant and has maintained such increase over a period
of three months prior to the exercise of any option.
At 31 December 2021, options over 3,850,000 (2020: 3,850,000)
shares remained outstanding at subscription prices ranging from
EUR0.14 to EUR0.17, with a weighted average price of EUR0.152
(2020: EUR0.152). These options expire at varying dates up to June
2024, with none exercisable at year end.
2020 Scheme
In 2020, the directors adopted a share option scheme which
contains certain performance criteria. No options can be issued
after 10 years of the scheme. The option price is the market price
immediately preceding the date of the grant. The "2020 scheme"
operates as an equity-settled share option scheme and the options
granted are subject to certain conditions. No option is exercisable
more than seven years after grant date and no option is exercisable
within one year of grant.
During 2021, 18,000,000 share options were granted under the
2020 Share options scheme to directors.
The applicable criteria for the exercise of the options are;
(i) 33% of the total number of options granted are exercisable after one year of grant.
(ii) 33% of the total number of options granted are exercisable after two years of grant.
(iii) The remaining 33% of the total number of options granted
are exercisable after a further year has elapsed.
Grant Date 21 May 2021 18 August 2021
Number of options granted 9,000,000 9,000,000
Volatility 150% 98%
Time period 7 years 7 years
Dividend yield 0% 0%
Risk free interest rate 0% 0%
Exercise price EUR0.038 EUR0.046
PROVIDENCE RESOURCES Plc
Note 9
Share options and warrants (continued)
During the prior year, 36,500,000 share options were granted
under the 2020 Share option scheme. Of that total, 31,500,000
options were granted to the then directors and 5,000,000 options
were granted to employees.
The applicable criteria for the exercise of the options are;
(i) 33% of the total number of options granted are exercisable
after one year of grant provided that the criteria agreed by the
Remuneration committee have been met.
(ii) 33% of the total number of options granted are exercisable
after two years of grant provided that the criteria agreed by the
Remuneration committee have been met.
(iii) The remaining 33% of the total number of options granted
are exercisable after a further year has elapsed provided that the
criteria agreed by the Remuneration committee have been met.
Grant Date 13 January 2020 6 April 2020
Number of options granted 15,000,000 21,500,000
Volatility 103% 108%
Time period 7 years 7 years
Dividend yield 0% 0%
Risk free interest rate (0.01%) (0.01%)
Exercise price GBP0.04 GBP0.03
At 31 December 2021, the closing share price was EUR0.0376
resulting in 9,500,000 options being exercisable.
Charge
The share-based payment charge for the year was EUR338,000
(2020: EUR448,000 ).
Warrants
On 5 May 2020, the Company raised EUR3.1m by the issue of
security instruments with each security instrument comprising one
ordinary share, with a par amount of EUR0.001, one GBP0.03 warrant
(expires in May 2021) and one GBP0.09 warrant (expires in May
2022). The fair value of the warrants was calculated using Black
Scholes model. The following key input assumptions were applied to
the initial valuation on issuance of these instruments:
GBP0.03 Warrants GBP0.09 Warrants
Number of warrants 177,973,004 177,973,004
Volatility 148% 148%
Time period 1 year 2 years
Dividend yield 0% 0%
Risk free interest rate (0.01%) (0.01%)
Exercise price GBP0.03 GBP0.09
Placing effective share
price 0.01068 0.01068
Initial value of security 0.00299 0.00349
Fair value EUR531,444 EUR621,982
PROVIDENCE RESOURCES Plc
Note 9
Share options and warrants (continued)
The EUR3.1m raised before expenses, from previous and new
shareholder investors, for the security instruments in May 2020 was
considered the transaction price fair value. The split of this fair
value on issuance of these security instruments, based on a placing
effective share price of EUR0.01068, was EUR0.531m for the GBP0.03
Warrants, EUR0.622m for the GBP0.09 Warrants and EUR1.901m for the
Ordinary Shares (split between share capital and share premium
account (note 6)).
During 2021, 86,061,529 of the GBP0.03 warrants were exercised.
There were a number of warrant transactions exercised in each of
the months before they expired on 6 May 2021. The key assumptions
used in the calculation of their fair value at the exercise date
are included in the table below. The weighted average closing price
was used to reflect the number of transactions in each month.
January February March April May 21
21 21 21 21
Number of warrants 287,372 1,666,666 1,000,000 65,975,822 17,131,669
Volatility 135% 135% 135% 206% 208%
Time period 0.30 year 0.18 year 0.10 year 0.016 year 0.003 year
Dividend yield 0% 0% 0% 0% 0%
Risk free interest
rate (0.61%) (0.61%) (0.61%) (0.61%) (0.61%)
Exercise price GBP0.03 GBP0.03 GBP0.03 GBP0.03 GBP0.03
Weighted average
closing
share price EUR0.075 EUR0.075 EUR0.054 EUR0.0392 EUR0.038
Fair value EUR12,685 EUR71,219 EUR23,419 EUR439,557 EUR62,804
The fair value of the warrants exercised during the year is
recognised in the movement of the warrant liability with a
corresponding increase in share premium.
On 31 December 2021, the GBP0.09 warrants were fair valued using
appropriate inputs including the closing share price on that day
of EUR0.0376. The period of 18 months has been used for the volatility
calculation for the GBP0.09 warrants which expired on 6 May 2022.
The 4-month period for the GBP0.09 warrants was too short and would
distort the volatility calculation as it a key component when calculating
the fair value using Black Scholes. The fair value movement being
the difference between 31 December 2020 and 31 December 2021 valuation
in the amount of EUR6.253m is recorded as finance income in the Income
statement. No GBP0.09 options were exercised and all have now expired.
Warrants
GBP0.03 Warrants GBP0.09 Warrants
Number of warrants 0 177,973,004
Volatility 0% 144%
Time period Expired 0.35 years
Dividend yield 0% 0%
Risk free interest rate 0% (0.071%)
Exercise price GBP0.00 GBP0.09
Closing share price 31
December
2021 EUR0.0376 EUR0.0376
Fair value as at 31
December
2021 - EUR460,271
PROVIDENCE RESOURCES Plc
Note 9
Share options and warrants (continued)
During 2020, 47,288,814 of the GBP0.03 warrants were exercised. There
were a number of warrant of transactions exercised in each of the
months. The key assumptions used in the calculation of their fair
value at the exercise date are included in the table below. The weighted
average closing price was used to reflect the number of transactions
in each month.
------------------------------------------------------------------------------------------ -----------
September 20 October 20 December 20
Number of warrants 24,648,335 10,966,667 11,673,812
Volatility 125% 125% 125%
Time period 0.58 year 0.50 year 0.33 year
Dividend yield 0% 0% 0%
Risk free interest rate (0.6%) (0.6%) (0.6%)
Exercise price GBP0.3 GBP0.03 GBP0.03
Weighted average closing
share
price EUR0.07 EUR0.08 EUR0.06
Fair value EUR1,138,828 EUR557,901 EUR324,687
The fair value of the warrants exercised during the year is
recognised as a finance expense of EUR2.021m in the income
statement with a corresponding increase in share premium.
On 31 December 2020, the warrants were fair valued using
appropriate inputs including the closing share price on that day of
EUR0.055. The period of 18 months has been used for the volatility
calculation for the GBP0.09 warrants which expired on 6 May 2022
and the GBP0.03 which expired on 6 May 2021. The 4-month period for
the GBP0.03 warrants was too short and would distort the volatility
calculation as it a key component when calculating the fair value
using Black Scholes. The fair value movement being the difference
between initial valuation and 31 December 2020 valuation in the
amount of EUR5.56m is recorded as a finance expense in the Income
statement.
GBP0.03 Warrants GBP0.09 Warrants
Number of warrants 130,684,190 177,973,004
Volatility 125% 125%
Time period .33 year 1.33 years
Dividend yield 0% 0%
Risk free interest rate (0.06%) (0.06%)
Exercise price GBP0.03 GBP0.09
Closing share price 31
December 2020 EUR0.055 EUR0.055
Fair value as at 31 December
2020 3,157,748 3,555,240
PROVIDENCE RESOURCES Plc
Note 9
Share options and warrants (continued)
The following table shows the fair value movement:
Number GBP0.03 Number GBP0.09
of of
warrants warrants warrants warrants Total
EUR'000 EUR'000 EUR'000
Initial valuation 177,973,004 EUR531 177,973,004 EUR622 EUR1,153
September 20 Exercised 24,648,335 EUR1,139 - - EUR1,139
October 20 Exercised 10,966,667 EUR558 - - EUR558
December 20 Exercised 11,673,812 EUR324 - - EUR324
Exercised fair
value 47,288,814 EUR2,021 - - EUR2,021
Fair value as at 130,684,190 EUR3,158 177,973,004 EUR3,555 EUR6,713
31 December 2020
Total 2020 fair
value
loss recognised
in the income statement
(see note 4) EUR4,648 EUR2,933 EUR7,581
January 21 Exercised 287,372 EUR13 - - EUR13
February 21 Exercised 1,666,666 EUR71 - - EUR71
March 21 Exercised 1,000,000 EUR23 - - EUR23
April 21 Exercised 65,975,822 EUR440 - - EUR440
May 21 Exercised 17,131,669 EUR63 - - EUR63
Exercised fair
value
movement recognised
in
the income statement 86,061,529 EUR610 - - EUR610
Fair value as at
31
December 2021 - - 177,973,004 EUR460 EUR460
Total fair value
gain
recognised in the
income
statement for the
period
to 31 December
2021 (EUR2,548) (EUR3,095) (EUR5,643)
PROVIDENCE RESOURCES Plc
Note 10
Related party transactions
The Group contracted NRG Well Management International Limited
to carry out technical studies relating to Barryroe in 2021. The
value of the work undertaken was EUR198,893 (2020: EUR14,305) and
was procured on an arm's length basis. The balance outstanding as
at 31 December 2021 was EUR177,564.
Andrew Mackay who is a non-executive Director of Providence
Resources Plc, is Chairman and part owner of NRG.
AM O'Sullivan PR was engaged by the Group in 2021 to develop and
coordinate a stakeholder management and communication strategy to
improve the understanding of the Barryroe project. The amount paid
under the contract in 2021 was EUR27,972 (2020: EURnil) procured on
an arm's length basis. There was no balance outstanding as at 31
December 2021.
Ann-Marie O'Sullivan, who is a non-executive Director of
Providence Resources Plc, is the owner of AM O'Sullivan PR
Limited.
Note 11
Commitments
The Group has capital commitments of approximately EUR0.183
million in respect of its share of costs of exploration and
evaluation and appraisal activities to be incurred in 2022 However
and subject to the timing of the Barryroe Lease Undertaking grant
then the Group could have additional commitments of EUR1.3m for
2022 which comprise two years of Lease Undertaking fees (backdated
to July 2021).
Note 12
Post Balance Sheet Events
On 6 May 2022, the 177,973,004 remaining GBP0.09 warrants
expired. The warrants were issued as part of the fund raising in
May 2020. No GBP0.09 warrants were exercised.
In June 2022, the Company raised gross proceeds of $1.8 million
(equivalent to approximately STGGBP1.5 million) through the
subscription for 45,312,316 Placing Securities and 51,686,693
Subscription Securities (each of which shall comprise one New
Ordinary Share and one STG1.5p Warrant).
The total of 96,999,009 New Ordinary Shares have been issued
pursuant to the Fundraising, representing less than 10 per cent of
the Company's issued Ordinary Share Capital. In addition 96,999,009
warrants ("the STG 1.5p Warrants") will be issued to Placees and
Subscribers. The allotment and issue of the Warrants is subject to
and conditional upon the passing of certain resolutions in relation
to the Warrants (the "Warrant Resolutions") at the AGM by the
requisite number of shareholders as required pursuant to the
Companies Act (the "Warrant Condition"). If the Warrant Condition
is not satisfied, the Warrants will not be issued to the Placees
and Subscribers. The issue of the Placing Shares and Subscription
Shares is not conditional on the passing of the Warrant
Resolutions.
On issue, the Warrants will entitle holders to subscribe for one
new Ordinary Share for each Warrant held at an exercise price of
STGGBP0.015 per Ordinary Share at any time for a period of 12
months following the date of satisfaction of the Warrant
Condition.
There have been no other significant events since the balance
sheet date which would require disclosure in or amendment of these
financial statements apart from the above.
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