London listed Oilex  has released its half-year report and subsequently undertaken a number of proactive steps to bolster the companies balance sheet and curtail certain cash commitments in response to the challenging trading conditions in the upstream oil and gas sector in addition to the uncertain and volatile capital markets. 

 

Half Year Results 

Following the voluntary shut in of the Cambay Field in Q1 2019 resulting in the cessation of production, no revenue has been recognised for the half year half year ended 31 December 2019.  The Group incurred a consolidated loss after income tax of $2,023,782 for the half year (31 December 2018: loss of $1,512,582). 

In the absence of a repayment schedule for outstanding cash calls from Gujarat State Petroleum Corporation, the Company has continued to provide in full the amounts owing from its Joint Venture partner as well as amounts owing from the Cambay and Bhandut Joint Ventures. 

Cash and cash equivalents held by the Group as at 31 December 2019 was therefore $402,261 (30 June 2019: $357,970). 

 

Placing and reduction of future liabilities 

The company has also announced today it has successfully renegotiated to extend payment terms both their Series B and C Loan Funding Agreements with a new series D loan being created. 

In addition to the renegotiation of loans, the company intends to raise £0.25 million to be applied to working capital and corporate requirements. The Placing is expected to be completed on or before 31 March 2020 and is conditional, inter alia, upon admission of the shares the subject of the Placing to trading on AIM. Notably, Republic Investment Management Pte Ltd (“Republic”) has subscribed for £250,000 (A$497,710) of the Placing. 

On 23 December 2019, the Company announced that it had into a binding term sheet to acquire a 100% participating interest in the Doyle-Peel licence (P2447) in the East Irish Sea (“EIS”), offshore the United Kingdom and entered into an exclusivity agreement for the potential acquisition of a 100% participating interest in the Castletown licence (P2076) in the EIS. 

The Company now advises that it will not be exercising its rights to acquire the Castletown licence (P2076) under the exclusivity agreement that will lapse in any event on 31 March 2020. Furthermore, the Company has agreed to the following amendments to the agreement with Burgate Exploration and Production Ltd ("Burgate") regarding the acquisition of the Doyle-Peel licence (P2447): 

  • the completion of the acquisition of the P2447 licence, subject to the applicable condition’s precedent, has been extended    from 30 June 2020 to 31 December 2020; and 

  • the issue of the share consideration for the acquisition of Doyle-Peel is subject to shareholder approval under Listing Rule   7.1. 

Managing Director of Oilex, Joe Salomon, said; "The current investment climate is highly volatile with limited availability of risk capital.  Accordingly, it is imperative that the Company acts decisively to strengthen its balance sheet and curtail its commitments. The proposed restructure of our UKCS acquisitions reduces our commitments while retaining our focus on our principal asset, the Cambay Project.  The Company remains committed to the settlement of the Cambay dispute as agreed with its joint venture partner, currently anticipated to be completed in the June 2020 quarter. 

We thank our cornerstone shareholders for their ongoing support of the Company during this challenging period while the Company implements the Cambay settlement."