Lansdowne Oil & Gas reports 'difficult' first half

The AIM-traded firm said that equated to a loss per share of 0.01p, adding that its cash balances at period end on 30 June totalled £0.03m, down from £0.16m at the end of 2018.

Looking at its financing, on 25 June the company secured debt funding of £0.15m from LC Capital and £0.15m from Brandon Hill Capital, both of which were existing significant shareholders.

Also in June, LC Capital Master Fund agreed to extend the repayment date of its outstanding loan of £1.05m to 31 December this 2019, with all other terms of the loan remaining unchanged.

On 28 June, SP Angel was appointed joint broker to the firm, as well as continuing in its role as nominated adviser, alongside Lansdowne's existing broker Brandon Hill Capital.

Operationally, at the Barryroe Oil Field, the board noted that in February the COSL Innovator was nominated by COSL to carry out the drilling programme.

Also in February, a new application was submitted to conduct a site survey, and in April, an application was submitted to convert SEL1/11 into a lease undertaking.

In June, further amendments to the farm-out agreement were announced, with an increase in the loan advances to EXOLA - a wholly-owned subsidiary of Providence Resources - from $19.5m to $24m, to reflect an increase in the scope of work.

An extension was also agreed for the receipt of the initial $9m payment from APEC Energy to EXOLA.

At the Helvick Lease undertaking, Lansdowne reported that MFDEVCO had continued its evaluation work as required under the farm-out agreement.

Since the period ended, in August EXOLA received its approval from Ireland’s Department of Communications, Climate Action and the Environment, to proceed with the site survey over the planned drilling locations.

In September, EXOLA completed a site survey over the first two planned appraisal well locations, dubbed ‘A’ and ‘B’, adding that the Barryroe partners had agreed a further extension for the receipt of the initial $9m payment to EXOLA to 30 September.

“The first half of 2019 has been a difficult time for the company, with regulatory delays in the permitting of the site survey operations and delay to the delivery of funding to EXOLA as called for under the farm-out agreement, delaying the planned drilling programme on Barryroe,” said chairman Tim Torrington.

“Recently, progress has been made with the completion of the site survey over the first two appraisal well locations, A and B.

“These wells, along with the fault block tested by the successful 48/24-10z well, are targeting over 70% of the estimated oil in place in Barryroe.”

Looking ahead, Torrington said the key issue facing the firm was the delay in the delivery of the loan funds from APEC, as called for under the farm-out agreement.

“A further extension to the payment date has been granted to 30 September.

“Whilst the situation therefore remains uncertain, we continue to believe that Barryroe, a significant oil accumulation in shallow water, has substantial value and we will continue our efforts to demonstrate and crystallise this.”

The announcement on 23 September that Ireland would seek to phase out oil exploration in the future came as a “complete surprise”, Torrington said, especially as respective governments had promoted investment and activity in the Irish offshore for more than 40 years, and had only recently reiterated their commitment to that objective.

“We welcome however, the clarification from the government that was provided to the Irish Offshore Operators' Association that this new policy relates solely to the award of new exploration licences.

“Both Barryroe and Helvick are covered by existing licences and therefore will not be impacted by any proposed changes to legislation.”