RNS Number : 1808I
Mosman Oil and Gas Limited
31 March 2020
 

 

31 March 2020

Mosman Oil and Gas Limited

("Mosman" or the "Company")

 

Unaudited Half Year Report

 

Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company, announces its unaudited results for the six months ended 31 December 2019, which have been reviewed by the appointed auditors.

 

Operations Review

 

Strategy

 

Mosman's 2019 objective was to identify opportunities which will provide operating cash flow and have further development upside, in conjunction with adding value to the Company's existing exploration permits. The practical aspects of that strategy were updated with the decision to focus on the East Texas region, with emphasis on the Stanley and Greater Stanley projects, and disposing of the Arkoma and Welch projects once there is more certainty in the markets. The Company has steadily increased production and is positioned for growth. However, events of early 2020 mean that growth objectives will now have to be constrained to manage cash flow, and costs have been further reduced. With current oil prices, the outlook for the next year will be challenging particularly if the oil price remains low as the likely financial impact on Mosman will be significant. Accordingly, the Board has been conservative in the impairment tests and reduced the book value of certain assets.

 

Results

 

The unaudited results for the six months reflect the earlier decisions of the Board and it is pleasing to see revenue almost double to $998,369 and Gross Profit increased almost eight-fold to $571,937 compared to the previous December six monthly period.

 

Mosman has been working hard to become cash flow positive at an overall corporate level and also become profitable. Mosman was close to achieving its objectives recording a loss for the period before impairment costs of $178,782.

 

Including impairment costs of $4,142,016, the loss for the period was $4,320,798.

 

Post 31 December Events

 

Despite the pleasing financial result to 31 December, Mosman cannot operate in a vacuum and very recent events associated with COVID-19, as well as the collapse in the oil price have caused extreme market turbulence and will fundamentally affect ongoing operations. Accordingly, the Directors have acted quickly and have implemented several steps designed to further reduce costs and secure the Company's long-term future.

 

Part of that review was examining the carrying value of all assets, and that led directly to the $4,142,016 Impairment Expense. The USA production assets were impaired by $2,760,720, and the Australian exploration assets were impaired by $1,381,296. The impairment is designed to reflect a potential change in the assets carrying value due to the oil price collapse.

 

Producing Projects in USA

 

Mosman has Working Interests in onshore producing projects located in the USA. These projects and Mosman's working interests before royalties (WI) are:

 

Project

Location

Working Interest

Stanley Polk County

Texas

14.85 to 16.50%

Welch Permian Basin

Texas

100.00%

Arkoma Stacked Pay

Oklahoma

27.00%

 

Production Summary for the six months ending 31 December 2019

 

Net Production attributable to Mosman for the six months was 13,253 boe, an increase of c13% which follows the c81% increase in the six months to June 2019.

 

Production Details

 

Further details are outlined below:

 

 

6 Months to

31 December 2019

 

6 Months to

31 December 2019

 

6 Months to

30 June 2019

 

6 Months to

30 June 2019

 

 

Total Project

Net Attributable

Total Project

Net Attributable

 

Gross boe

Net boe

Gross boe

Net boe

Stanley

42,268

6,877

14,153

2,353

Welch

6,851

5,252

6,210

4,760

Arkoma

5,868*

1,124*

16,945

4,227

Strawn **

-

-

503

402

 

Total boe

 

54,987

 

               13,253

 

37,811

 

11,742

 

* Figures for five months of the period only as Mosman is awaiting December figures for Arkoma

**Strawn project was sold in June 2019

 

 

Additional Prospective Projects in USA

 

In addition, a Working Interest is owned in additional projects, including Challenger, Champion and the Greater Stanley area that was recently acquired and has some production. 

 

Acquisition and Development

 

A total of $510,526 was expended on acquisition costs and development expenditure during the period. Development expenditure during the period included workovers and repairs that were identified to increase production and develop individual assets.

 

 

Australian Exploration

 

Up until recently Mosman was continuing to progress the exploration portfolio in Australia and maintains its interest in the 100% owned granted permits EP 145 and one application (EPA 155).

 

On ground activities have recently been restricted.

 

Corporate

 

Funding

 

 

Mosman will continue to raise funds as required to expand its operations and production and support its current operations, within the limits of the capital markets.

 

There were no shares issued during the period. On 14 February 2020, the Company announced an equity placing and a subscription which is disclosed in Subsequent Events below.

 

Norseman Capital Ltd ("Norseman") (previously Gem International Resources Inc)

 

 

Mosman continues to hold its shareholding in Norseman and notes that it is now admitted to trade on the NEX Board of the Toronto Stock Exchange (TSX).

 

The current Board of Norseman (which includes Mosman's Executive Chairman) have recently overseen the relisting, a small capital raising and the settlement of most creditors.

 

Norseman is considering potential business opportunities, but in the current climate it is extremely difficult to predict the chance of completion, or the timetable.

 

Blackstone Oil and Gas LLC ('Blackstone')

 

Blackstone was previously Mosman's strategic partner and a co-investor in the Strawn and Arkoma projects. That arrangement has now ceased. Blackstone became indebted to Mosman for certain amounts due in respect of those projects. Payment has not been forthcoming despite various commitments made by Blackstone.

 

Mosman commenced legal action against Blackstone to recover amounts due under a promissory note. Mosman has now successfully obtained a Court judgement of c USD 171,000. The next step is for Blackstone's assets to be auctioned off with Mosman receiving the proceeds of the asset sales. The amount received will be dependent on the auction proceeds. Mosman will evaluate its alternatives for recovery of the balance of funds due from Blackstone (c USD 146,000 in addition to the promissory note).

 

Due to the uncertainty caused by recent events amounts owing by Blackstone have been substantially impaired

 

Subsequent Events

 

In February 2020, the Company raised $585,138 (before expenses) by placing 200,000,000 shares at a price of 0.15p per share, together with one warrant to subscribe for one share at an exercise price of 0.23p with a term of 12 months per placing share.

 

In addition, two Directors of Mosman, John Barr and Andy Carrol indicated their intent to subscribe for $120,000 on the same terms and conditions.

 

Subsequent to the end of the period, the combined global events of a collapse in the oil price and the spread of Covid-19, have affected all stock markets and most countries.  It is extremely difficult to predict the outcome of these matters. The Company has taken action to reduce costs, and all operations have been reviewed. These matters were announced on 24 March 2020 and included a focus on reducing operating costs and preserving the Company's cash resources.

 

Other than the above, there were no significant events subsequent to the date of statement of financial position.
 

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For The Half Year Ended 31 December 2019

All amounts are in Australian Dollars

 

 

Notes

Consolidated

6 months to

31 December 2019

$

Consolidated

6 months to  31 December 2018

$

 

 

 

 

Revenue

 

998,369

521,326

Cost of sales

2

(426,432)

(435,273)

Gross profit

 

571,937

86,053

 

 

 

 

Interest income

 

23,228

15,001

Other income

 

39,893

8,546

 

 

 

 

Administrative expenses

 

(95,766)

(94,095)

Corporate expenses

3

(433,166)

(417,494)

Directors fees

 

(60,000)

(60,000)

Exploration expenses incurred not capitalised

 

-

(7,987)

Employee benefits expense

 

(34,004)

(46,093)

Evaluation and due diligence

 

(140,430)

(100,020)

Non-cash share based payments expense

 

-

(10,149)

Finance costs

 

(5,177)

(2,250)

Amortisation expense

 

(43,089)

(47,576)

Depreciation expense

 

(2,208)

(3,135)

Impairment expense

 

(4,142,016)

-

Costs associated with abandoned acquisitions

4

-

(40,214)

Share of net loss from joint operation

 

-

(11,354)

Loss from ordinary activities before income tax expense

 

(4,320,798)

(730,767)

Income tax expense

 

-

-

Net loss for the period

 

(4,320,798)

(730,767)

 

 

 

Other comprehensive income

 

 

 

Items that may be reclassified to profit or loss

 

 

 

Gain on financial assets at fair value through other comprehensive income (FVOCI)

5

60,626

-

Foreign currency (loss)/gain

5

(12,023)

60,330

Other comprehensive income for the period, net of tax

 

48,603

60,330

Total comprehensive loss attributable to members of the entity

 

(4,272,195)

(670,437)

 

 

 

Basic and diluted loss per share

 

(0.73) cents

(0.14) cents

 

The accompanying notes form part of these consolidated financial statements.
 

 

Condensed Consolidated Statement of Financial Position

As at 31 December 2019

All amounts are in Australian Dollars

 

 

Notes

Consolidated

Balance as at 31 December 2019

Consolidated

Balance as at 30 June      2019

 

 

 

$

$

 

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

 

 124,024

823,959

Trade and other receivables

6

 180,702

330,160

Inventory

 

 66,203

77,961

Other assets

7

 67,545

35,756

Other financial assets

 

 115,485

-

Total current assets

 

553,959

1,267,836

 

 

 

 

Non-Current Assets

 

 

 

Property, plant & equipment

 

 11,827

14,034

Oil and gas assets

9

1,992,622

3,905,106

Loans receivable

8

96,445

337,201

Other receivables

 

 50,000

50,000

Capitalised oil and gas exploration expenditure

10

250,000

1,615,956

Total non-current assets

 

2,400,894

5,922,297

 

 

 

 

Total Assets

 

 2,954,853

7,190,133

 

 

 

 

Current Liabilities

 

 

 

Trade and other payables

11

 609,473

569,234

Provisions

 

 23,846

27,170

Total current liabilities

 

 633,319

596,404

 

 

 

 

Total Liabilities

 

 633,319

596,404

 

 

 

 

Net Assets

 

 2,321,534

6,593,729

 

 

 

 

Shareholders' Equity

 

 

 

Contributed equity

12 a)

 30,164,872

30,164,872

Reserves

13

 579,440

530,837

Accumulated losses

 

 (28,422,778)

(24,101,980)

Equity attributable to shareholders

 

 2,321,534

6,593,729

Non-controlling interest

 

-

-

 

 

 

 

Total Shareholders' Equity

 

 2,321,534

6,593,729

 

 

 

 

 

The accompanying notes form part of these consolidated financial statements.

 

 

 

Condensed Consolidated Statement of Changes in Equity

For the Half Year Ended 31 December 2019

All amounts are in Australian Dollars

 

 

Accumulated

Losses

Contributed Equity

Reserves

Non-Controlling Interest

Total

 

$

$

$

$

$

Balance at 1 July 2019

(24,101,980)

30,164,872

530,837

-

6,593,729

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

Loss for the period

(4,320,798)

-

-

-

(4,320,798)

Other comprehensive loss for the period

-

-

48,603

-

48,603

Total comprehensive loss for the period

           (4,320,798)

     

     -

           48,603

 

-

 

(4,272,195)

 

 

 

 

 

 

Transactions with owners, in their capacity as owners, and other transfers:

New shares issued

-

-

-

-

-

Cost of raising equity

-

-

-

-

-

Total transactions with owners and other transfers

-

-

-

-

-

Balance at 31 December 2019

           (28,422,778)

           30,164,872

 

579,440

 

           -

           2,321,534

 

 

 

 

 

 

Balance at 1 July 2018

(22,921,464)

28,044,804

420,860

28,320

5,572,520

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

Loss for the period

(719,413)

-

-

(11,354)

(730,767)

Other comprehensive loss for the period

-

-

60,330

-

60,330

Total comprehensive loss for the period

(719,413)

-

60,330

(11,354)

(670,437)

 

 

 

 

 

 

Transactions with owners, in their capacity as owners, and other transfers:

 

New shares issued

-

887,377

-

-

887,377

Cost of raising equity

-

(62,808)

-

-

(62,808)

Total transactions with owners and other transfers

-

824,569

-

-

824,569

Balance at 31 December 2018

(23,640,877)

28,869,373

481,190

16,966

5,726,652

 

 

These accompanying notes form part of these consolidated financial statements
 

Condensed Consolidated Statement of Cash Flows

For the Half Year Ended 31 December 2019

All amounts are in Australian Dollars

 

 

 

Consolidated

6 months to    31 December 2019

Consolidated

 6 months to 31 December 2018

 

 

$

$

 

 

 

 

Cash flows from operating activities

 

 

 

Receipts from customers

 

 1,010,125

540,201

Interest received & other income

 

-

23,546

Payments to suppliers and employees

 

 (1,257,973)

(1,087,329)

Bonds refunded

 

 10,000

66,735

Interest paid

 

 (5,177)

(2,249)

Net cash used in operating activities

 

 (243,025)

(459,096)

 

 

 

 

Cash flows from investing activities

 

 

 

Payments for exploration and evaluation

 

 (15,340)

(174,280)

Deposits paid for acquisition

 

-

(136,735)

Costs associated with abandoned acquisitions

 

-

(40,214)

Payments for oil and gas acquisitions

 

 (162,009)

(690,449)

Payments for oil and gas assets

 

 (332,411)

(171,311)

Net cash used in investing activities

 

 (509,760)

(1,212,989)

 

Cash flows from financing activities

 

 

 

Proceeds from shares issued

 

-

887,376

Payments for costs of capital

 

-

(62,808)

Payments for loans to third parties

 

52,850

(33,870)

Transactions with non-controlling interest

 

-

(100,769)

Net cash provided by financial activities

52,850

689,929

 

 

 

 

Net decrease in cash and cash equivalents

 

(699,935)

(982,156)

Cash and cash equivalents at the beginning of the financial period

 

823,959

1,323,084

Cash and cash equivalents at the end of the financial period

 

 

 124,024

340,928

 

The accompanying notes from part of these consolidated financial statements

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

         1. Summary of Significant Accounting Policies

 

   Statement of Compliance

 

The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 'Interim Financial Reporting'. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS34 'Interim Financial Reporting'. The half-year report does not include notes of the type normally included in an annual financial report and should be read in conjunction with the most recent annual financial report.

 

Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts presented in Australian dollars, unless otherwise noted.

 

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Group's 2019 annual financial report for the financial year ended 30 June 2019, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards (IFRS).

 

Going Concern
The condensed consolidated financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and the discharge of liabilities in the normal course of business.

 

The directors have considered the funding and operational status of the business in arriving at their assessment of going concern and believe that the going concern basis of preparation is appropriate, based upon the following:

 

· Current cash and cash equivalents on hand;

· The ability to further vary cash flow depending upon the achievement of certain milestones within the business plan and;

· The ability of the Company to obtain funding through various sources, including debt and equity.

 

Exploration and Evaluation Costs

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward in respect of an area for which the rights to tenure are current and that has not at reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or relating to, the area of interest are continuing.

 

Impairment of Exploration and Evaluation Assets

The ultimate recoupment of the value of exploration and evaluation assets is dependent on the successful development and commercial exploitation, or alternatively, sale, of the exploration and evaluation assets.

 

Impairment tests are carried out when there are indicators of impairment in order to identify whether the asset carrying values exceed their recoverable amounts. There is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts.

 

 

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

1. Summary of Significant Accounting Policies (Continued)

 

The key areas of judgement and estimation include:

 

· Recent exploration and evaluation results and resource estimates;

· Environmental issues that may impact on the underlying tenements; and

· Fundamental economic factors that have an impact on the operations and carrying values of assets and liabilities.

 

Revenue Reporting

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.

 

The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group's activities as described below. The group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

 

Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument.

 

Oil and Gas assets

The cost of oil and gas producing assets and capitalised expenditure on oil and gas assets under development are accounted for separately and are stated at cost less accumulated amortisation and impairment losses. Costs include expenditure that is directly attributable to the acquisition or construction of the item as well as past exploration and evaluation costs.

 

When an oil and gas asset commences production, costs carried forward are amortised on a units of production basis over the life of the economically recoverable reserves. Changes in factors such as estimates of economically recoverable reserves that affect amortisation calculations do not give rise to prior financial period adjustments and are dealt with on a prospective basis.

 

Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance.

 

New standards and interpretations

 

AASB 16: Leases

The consolidated group has adopted AASB 16 from 1 July 2019.

 

The adoption of this new Standard has resulted in the Group recognising a right-of-use asset and related lease liability in connection with all current leases except for those identified as low-value or having a remaining lease term of less than 12 months from the date of initial application.

 

On 31 December 2019, the Group did not have any non-low value operating leases with lease terms longer than 12 months. As a result, the adoption of AASB 16 did not have any effect on the Group's opening balances at 1 July 2019.

 

 

 

 

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

 

 

Consolidated

6 months to 31 December 2019

Consolidated

     6 months to 31 December 2018

 

$

$

2.    Cost of sales

 

Cost of sales

165,843

129,846

Lease operating expenses

260,589

305,427

 

426,432

435,273


3.    Corporate costs

 

Accounting, Company Secretary and Audit fees

96,537

92,933

Consulting fees - Board

161,000

221,750

Consulting fees - Other

82,963

56,538

Legal and compliance fees

92,666

46,273

 

433,166

417,494


4.    Costs associated with abandoned acquisitions

 

 

Costs Incurred 

-

40,214

 

 

40,214

 

5.    Other comprehensive income

 

 

Gain on financial assets at fair value through other comprehensive income (FVOCI)

60,626

-

Foreign currency (loss)/gain

(12,023)

60,330

 

48,603

60,330

 

 

 

 

Consolidated

Balance as at 31 December 2019

Consolidated

     Balance as at 30 June

2019

 

$

$

6.    Trade and other receivables

 

 

Deposits

-

10,642

GST receivable

24,247

18,002

Cash calls receivable1

-

208,791

Accrued revenue

148,238

84,516

Other receivables

8,217

8,209

 

180,702

330,160

         

1. The $208,791 decrease in the receivable comprises of $209,000 impairment of the loan, less $209 of foreign exchange gains.

 

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

 

Consolidated

Balance as at 31 December 2019

Consolidated

     Balance as at 30 June

2019

 

$

$

       

 

7.    Other assets

 

 

Prepayments

67,545

35,756

 

67,545

35,756

       

 

8.    Loans receivable

 

 

Loan to GEM International Resources Inc1

17,121

119,034

Loan to joint ventures2

71,367

210,210

Other loans

7,957

7,957

 

96,445

337,201

       

1. This loan was repaid in full in February 2020;

2. The $138,843 decrease in the receivable comprises of $187,904 impairment of the loan, less $49,061 of interest and reimbursements due.

 

9.    Oil and gas assets

 

 

Cost brought forward

3,905,106

2,592,814

Acquisition of oil and gas assets during the period

        162,009

883,151

Disposal of oil and gas assets on sale during the period

                  -  

(133,503)

Capitalised equipment workovers

        333,177

645,602

Amortisation for the year

         (43,854)

(82,958)

Impairment of oil and gas assets3

(2,363,816)

-

Carrying value at end of the period

     1,992,622  

3,905,106

3. Impairment of $2,363,816 comprises of $1,475,395 relating to the Arkoma project, and $888,421 relating to the Welch project.

 

 

10.    Capitalised oil and gas expenditure

 

 

Costs brought forward

1,615,956

1,491,019

Exploration costs incurred during the period

15,340

124,937

Impairment of oil and gas expenditure4

(1,381,296)

-

Carrying value at the end of the period

250,000

1,615,956

4. Relates to impairment of exploration expenditure in the Amadeus Basin.

 

 

11.    Trade and other payables

 

 

Trade creditors

521,533

503,470

Other creditors and accruals

87,940

65,764

 

609,473

569,234

       
 

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

12.    Contributed Equity

 

 

Ordinary Shares

 

 

Total shares at 31 December 2019: 885,810,968 (30 June 2019: 885,810,968) ordinary shares fully paid

885,810,968

885,810,968

 

 

 

a) Shares movements during the half-year

Value of shares

$

No. of shares

 

Balance at 30 June 2019

30,164,872

885,810,968

 

Shares issued

-

-

 

Cost of issued shares

-

-

Balance at 31 December 2019

30,164,872

885,810,968

 

 

Consolidated

Balance as at 31 December 2019

Consolidated

     Balance as at 30 June

2019

13.    Reserves

 

 

Options reserve

471,818

471,818

Asset revaluation reserve

(341,786)

(402,412)

Foreign currency translation reserve

449,408

461,431

 

579,440

530,837

 

a) Options Reserve

 

 

 

Options Reserve at the beginning of the period

471,818

471,818

Options Reserve at the end of the period

471,818

471,818

 

 

b) Asset Revaluation Reserve

 

 

 

Asset Revaluation Reserve at the beginning of the period

(402,412)

(402,412)

Revaluation of FVOCI shares

60,626

-

Asset Revaluation Reserve at the end of the period

(341,786)

(402,412)

 

 

c) Foreign Currency Translation Reserve

 

 

 

Foreign Currency Translation Reserve at the beginning of the period

461,431

351,454

Current movement in the period

(12,023)

109,977

Foreign Currency Translation Reserve at the end of the period

449,408

461,431

 

 

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

14        Segment Information

 

The Group has identified its operating segments based on the internal reports that are reviewed and used by the board to make decisions about resources to be allocated to the segments and assess their performance.

 

Operating segments are identified by the board based on the Oil and Gas projects in Australia the United States. Discrete financial information about each project is reported to the board on a regular basis.

 

The reportable segments are based on aggregated operating segments determined by the similarity of the economic characteristics, the nature of the activities and the regulatory environment in which those segments operate.

 

The Group has three reportable segments based on the geographical areas of the mineral resource and exploration activities in Australia, the United States. Unallocated results, assets and liabilities represent corporate amounts that are not core to the reportable segments.

 

(i)       Segment performance

 

 

 

 

 

 

New Zealand

$

United States

$

Australia

$

Total

$

Period ended 31 December 2019

 

 

 

 

Revenue

 

 

 

 

Revenue

-

998,369

-

998,369

Interest income

-

20,179

3,049

23,228

Other income

-

29,811

10,082

39,893

Segment revenue

-

1,048,359

13,131

1,061,490

 

 

 

 

 

Segment Result

 

 

 

 

Loss

 

 

 

 

Allocated

 

 

 

 

-      Corporate costs

-

(99,313)

(333,853)

(433,166)

-      Administrative costs

-

(23,020)

(72,746)

(95,766)

-      Lease operating expenses

-

(260,589)

-

(260,589)

-      Cost of sales

-

(165,843)

-

(165,843)

Segment net profit/(loss) before tax

-

499,594

(393,468)

106,126

 

 

 

 

 

Reconciliation of segment result to net loss before tax

 

 

 

 

 

 

 

 

 

Amounts not included in segment result but reviewed by the Board

 

 

 

 

-      Evaluation and due diligence

-

(47,542)

(92,888)

(140,430)

-      Amortisation

-

(43,089)

-

(43,089)

-      Impairment

-

(2,760,720)

(1,381,296)

(4,142,016)

Unallocated items

 

 

 

 

-      Employee benefits expense

 

 

 

(94,004)

-      Finance costs

 

 

 

(5,177)

-      Depreciation

 

 

 

(2,208)

Net Loss before tax from continuing operations

 

 

 

(4,320,798)

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

(i)       Segment performance (continued)

 

 

 

New Zealand

$

United States

$

Australia

$

Total

$

Period ended 31 December 2018

 

 

 

 

Revenue

 

 

 

 

Revenue

-

500,503

20,823

521,326

Interest income

-

14,524

477

15,001

Other income

924

-

7,622

8,546

Segment revenue

924

515,027

28,922

544,873

 

 

 

 

 

Segment Result

 

 

 

 

Loss

 

 

 

 

Allocated

 

 

 

 

-      Corporate costs

-

(11,178)

(406,316)

(417,494)

-      Administrative costs

(469)

(43,621)

(50,005)

(94,095)

-      Lease operating expenses

-

(305,427)

-

(305,427)

-      Cost of sales

-

(129,846)

-

(129,846)

-      Share of net loss of joint operation

-

(11,354)

-

(11,354)

Segment net profit/(loss) before tax

455

(13,601)

(427,399)

(413,343)

 

 

 

 

 

Reconciliation of segment result to net loss before tax

 

 

 

 

Amounts not included in segment result but reviewed by the Board

 

 

 

 

-      Exploration expenditure incurred             

       not capitalised

(7,987)

-

-

(7,987)

-      Evaluation and due diligence

-

-

(100,020)

(100,020)

-      Projects abandoned

(1,930)

-

(38,284)

(40,214)

-      Amortisation

-

(47,576)

-

(47,576)

Unallocated items

 

 

 

 

-      Employee benefits expense

 

 

 

(106,093)

-      Share based payments

 

 

 

(10,149)

-      Finance costs

 

 

 

(2,250)

-      Depreciation

 

 

 

(3,135)

Net Loss before tax from continuing operations

 

 

 

(730,767)

 

 

 

 

 

 

 

 

             
 

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

14     Segment Information (continued)

 

 

 

 

(ii)       Segment assets

 

 

 

 

 

New Zealand

$

United States

$

Australia

$

Total

$

 

 

 

 

Segment assets as at 1 July 2019

-

4,618,616

2,571,517

7,190,133

Segment asset balances at end of

period

 

 

 

 

-      Exploration and evaluation

-

-

15,050,298

15,050,298

-      Capitalised Oil and Gas Assets

-

4,488,389

-

4,488,389

-      Less: Amortisation

-

(131,950)

-

(131,950)

-      Less: Impairment

-

(2,363,817)

(14,800,298)

(17,164,115)

 

-

1,992,622

250,000

2,242,622

 

 

 

 

 

Reconciliation of segment assets to total assets:

 

 

 

 

Other assets

-

305,387

406,844

712,231

Total assets from continuing operations

-

2,298,009

656,844

2,954,853

 

 

New Zealand

$

United States

$

Australia

$

Total

$

 

As at 30 June 2019

 

 

 

 

 

Segment assets as at 1 July 2018

60,911

3,098,906

2,868,289

6,028,106

 

Segment asset balances at end of

year

 

 

 

 

 

-      Exploration and evaluation

-

-

1,615,956

1,615,956

 

-      Capitalised oil and gas assets

-

4,126,703

-

4,126,703

 

Assets

 

 

 

 

 

-      Less: Amortisation

-

(88,094)

-

(88,094)

 

-      Less: Expenditure previously capitalized, written off in the year

-

(133,503)

-

(133,503)

 

 

-

3,905,106

1,615,956

5,521,062

 

 

 

 

 

 

 

Reconciliation of segment assets to total assets:

 

 

 

 

 

Other assets

-

713,510

955,561

1,669,071

 

Total assets from continuing operations

-

4,618,616

2,571,517

7,190,133

 

 

 

 

 

 

 

                       

 

 

 

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

14     Segment Information (continued)

 

(iii)     Segment liabilities

 

 

 

 

 

New Zealand

$

United States

$

Australia

$

Total

$

As at 31 December 2019

 

 

 

 

Segment liabilities as at 1 July 2019

-

316,192

280,212

596,404

Segment liability (decreases) for the year

-

(118,525)

155,440

36,915

 

 

197,667

435,652

633,319

Reconciliation of segment liabilities to total liabilities:

 

 

 

 

Other liabilities

-

-

-

-

Total liabilities from continuing operations

-

197,667

435,652

633,319

 

 

 

 

 

As at 30 June 2019

 

 

 

 

Segment liabilities as at 1 July 2018

146,071

136,374

173,141

455,586

Segment liability (decreases) for the year

(146,071)

179,818

107,071

140,818

 

-

316,192

280,212

596,404

Reconciliation of segment liabilities to total liabilities:

 

 

 

 

Other liabilities

-

-

-

-

Total liabilities from continuing operations

-

316,192

280,212

596,404

           

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

15        Producing assets

 

The Group currently has 3 (previously 4) producing assets, which the Board monitors as separate items to the geographical and operating

segments. The Arkoma, Stanley, Strawn and Welch are Oil and Gas producing assets in the United States.

 

It should be noted that the Strawn Project was a 50% joint operation and as a result the amounts below are only the apportionment of the

Mosman ownership right. As noted elsewhere in this report the Strawn project was divested throughout the year due to its poor performance.

 

Project performance is monitored by the line items below.

 

 

(i)       Project performance

 

 

 

 

 

 

Arkoma

$

Stanley

$

Welch

$

Other Projects

$

Total

$

Half-Year Ended 31 December 2019

 

 

 

 

 

Revenue

 

 

 

 

 

Oil and gas project related revenue

9,564

 365,396

 623,409

-

 998,369

Producing assets revenue

9,564

 365,396

 623,409

-

998,369

 

 

 

 

 

 

Project-related expenses

 

 

 

 

 

-     Cost of sales

880

20,474

144,489

-

165,843

-     Lease operating expenses

10,560

15,401

214,301

20,327

260,589

Project cost of sales

11,440

35,875

358,790

20,327

426,432

 

 

 

Project gross profit

 

 

 

 

 

Gross profit

(1,876)

329,521

264,619

(20,327)

571,937

 

 

 

 

 

 

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

15        Producing assets (continued)

 

(i)       Project performance

 

 

 

 

 

 

Arkoma

$

Stanley

$

Strawn

$

Welch

$

Total

$

Half-Year Ended 31 December 2018

 

 

 

 

 

Revenue

 

 

 

 

 

Oil and gas project related revenue

41,621

 8,223

55,667

 415,815

 521,326

Producing assets revenue

41,621

 8,223

55,667

 415,815

521,326

 

 

 

 

 

 

Project-related expenses

 

 

 

 

 

-     Cost of sales

-

-

14,738

115,108

129,846

-     Lease operating expenses

39,336

4,490

48,927

 212,674

305,427

Project cost of sales

39,336

4,490

 63,665

 327,782

435,273

 

 

 

Project gross profit

 

 

 

 

 

Gross profit

2,285

3,733

 (7,998)

 88,033

86,053

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

             

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

 

16                    Expenditure Commitments

 

(a)       Exploration

 

The Company has certain obligations to perform minimum exploration work on Oil and Gas tenements held.  These obligations may vary over time, depending on the Company's exploration programs and priorities.  At 31 December 2019, the Company has estimated the monetary value of the total exploration commitments for the next 12 months are as follows:

 

Entity

Tenement

$

 

 

 

 

 

Trident Energy Limited1

EP 145

-

 

Oilco Pty Ltd

EPA155

-

 

 

 

-

 

 

1 An extension to the work program condition has been granted until 21 August 2020, when there will be a commitment for completion of 100km of 2D seismic surveys, seismic processing and interpretation and well planning. If the Company has not fulfilled the above obligations, a negotiation with the Northern Territory Department of Primary Industry and Resources may be commenced to extend the period for completion, or the permit relinquished. There can be no certainty that an extension may be granted.

 

(b)       Capital Commitments

 

The Company had no capital commitments at 31 December 2019 (2018 - $Nil).

 

 

17        Subsequent Events

 

In February 2020 the Company raised $585,138 (before expenses) by placing 200,000,000 shares at a price of 0.15p per share, together with one warrant to subscribe for one share at an exercise price of 0.23p with a term of 12 months per placing share.

 

In addition, two Directors indicated their intent to subscribe for $120,000 on the same terms and conditions.

 

Subsequent to the end of the period the global events of a collapse in the oil price and the spread of Covid-19 have affected most countries.  It is extremely difficult to predict the outcome of these matters. The company has taken action to reduce costs, and all operations have been reviewed. These matters were announced on 24 March 2020.

 

Other than the above, there were no significant events subsequent to the date of statement of financial position.

 

18        Dividends

 

No dividends have been paid or proposed during the half year ended 31 December 2019.

 

 

 

Enquiries:

 

Mosman Oil & Gas Limited

John W Barr, Executive Chairman

Andy Carroll, Technical Director

jwbarr@mosmanoilandgas.com

acarroll@mosmanoilandgas.com

 

NOMAD and Joint Broker

SP Angel Corporate Finance LLP

Stuart Gledhill / Richard Hail / Soltan Tagiev

+44 (0) 20 3470 0470

 

Alma PR

Justine James

+44 (0) 20 3405 0205

+44 (0) 7525 324431

mosman@almapr.co.uk

 

Joint Broker

Monecor (London) Ltd

trading as ETX Capital

Thomas Smith

+44 (0) 20 7392 1432

 

Updates on the Company's activities are regularly posted on its website: www.mosmanoilandgas.com 

 

 


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