Nu-Oil, the independent Oil and Gas Company, today announces its results for the year ended 30 June 2018.
HIGHLIGHTS
Building a portfolio of Stranded Fields
- The Company anticipates the continued focus on the identification and development of stranded and marginal fields through the investment in, and relationship with, Marginal Field Development Company (MFDevCo) Ltd. (‘MFDevCo’) in which Nu-Oil and Gas plc. (‘Nu-Oil’ or the ‘Company’) holds a 50% interest.
- This marginal field strategy will seek to utilise innovative engineering solutions that reduce both Capex and Opex and are redeployable to build a portfolio of low risk, highly appraised marginal assets.
- The Company continues to actively seek new assets in conjunction with MFDevCo.
Western Newfoundland
- The Company entered into a Production Sharing Agreement (the ‘PSA’) with PVF Energy Services Inc. (‘PVF’) for PL2002-01(A) on 31 January 2017. The PSA provides for the Company to receive 50% of net revenue from production following the recovery of any costs incurred by PVF in performing its obligations.
- PVF has faced some challenges in developing operations on PL2002-01(A) which has resulted in unexpected delays hampering, but not halting progress.
- The Company, with PVF and others are also in discussion regarding wider regional rejuvenation plans which would provide a step change in the portfolio interest as it currently stands.
Financial
- Loss before tax for the year was £1,878,000 (2017: £1,671,000). The main area of expense has been the continuing development of the foundations for the marginal field initiative. Management continued to maintain its cost discipline in western Newfoundland, this cost discipline was in part off-set by the continued expenditure with respect to the implementation of the marginal field strategy. The loss included depreciation, amortisation and provision charges of £341,000 in the period relating to tangible and intangible assets consistent with its accounting policies
- The Group has a net liability position of £1,053,000 (2017: £1,880,000). The net liabilities are mainly due to the loan owed to Shard Capital Management (‘Shard’) and to related party creditors. At this time neither Shard nor related parties have sought to recover these debts.
- The Group had cash balances of £861,000 at 30 June 2018 (2017: £654,000).
- The status of commercial discussions, the Company’s ability to raise capital and the Company’s cash position provide management with the confidence that the business model has the potential to allow the Group to satisfy its liabilities and operate as a going concern.
- During the year the Company raised £2,706,000 net through the issue of new ordinary shares.
OUTLOOK
- Clear focused strategy for commercialising stranded and marginal fields.
- Recent enquiries provide directors and management with confidence regarding the viability of the business model and provide confidence that the Company can add further projects to its portfolio.
Nigel Burton, CEO of Nu-Oil, commented:
“The Company has made progress on several projects this year and we are excited about the opportunities that lie ahead. Activity has increased in MFDevCo and we look forward to updating the market as it acquires projects and concludes investigations into alternative marginal field commercialisation methods.
I’d like to thank all stakeholders, in particular shareholders, for their support and we look forward to providing updates in 2019.”
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