BCE.L

Beacon Energy plc
Beacon Energy PLC - Interim Results
14th October 2024, 06:06
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RNS Number : 9699H
Beacon Energy PLC
14 October 2024
 

14 October 2024

 

Beacon Energy plc

("Beacon Energy" or the "Company")

 

Interim Results

 

Beacon Energy (AIM:BCE), the full-cycle oil and gas company with a portfolio of onshore German assets through its wholly-owned subsidiary, Rhein Petroleum GmbH ("Rhein Petroleum"), announces its half-yearly report for the six months ended 30 June 2024.

 

Enquiries:

Beacon Energy plc

Stewart MacDonald (CEO)

+44 (0)20 7466 5000

Strand Hanson Limited (Financial and Nominated Adviser)

Rory Murphy / James Bellman

+44 (0)20 7409 3494

 

Buchanan (Public Relations)

Ben Romney / Barry Archer / George Pope

+44 (0)20 7466 5000

 

Tennyson Securities Limited (Broker)

Peter Krens / Ed Haig-Thomas

  +44 (0)20 7186 9030

 

 

Interim Consolidated Statement of Comprehensive Income

 

 

Unaudited
Six months ended
30 Jun 2024

Audited
Period ended
31 Dec 2023

Restated Unaudited
Six months ended
30 Jun 2023

 

Notes

000

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Income





Operating income


634

962

313

Other income


33

10

2

Total income


667

972

315

Crude oil purchase from partners


-

(279)

(130)

Operating expenses


(1,725)

(3,637)

(448)

Operating loss


(1,058)

(2,944)

(263)

 

Other administrative expenses

4

(993)

(3,830)

(2,254)

Net loss before Finance Costs and Taxation


(2,051)

(6,774)

(2,517)

 


 

 

 

Finance costs


(76)

(362)

59

Effects of exchange gain/loss


-

125

-

At acquisition negative goodwill

6

-

3,556

3,556

Profit / (Loss) before tax

 

(2,127)

(3,455)

1,098






Tax expense


946

(1)

325

Profit / (Loss) after tax attributable to owners of the parent

 

(1,181)

(3,456)

1,423

 





Other comprehensive income





Exchange differences on translation of foreign operations


212

(276)

(507)

Total comprehensive Profit / (Loss) for the year attributable to owners of the parent

 

(969)

(3,732)

916

 


 

 

 

Basic and diluted profit/(loss) per share attributable to owners of the parent during the year (expressed in US cents per share)

7

(0.01)

(0.04)

0.03

 

The accompanying notes from an integral part of these consolidated financial statements.


Interim Consolidated Statement of Financial Position


 

Unaudited
30 Jun 2024

 

Notes

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Non-current assets

 




Property, plant & equipment


24,671

20,336

11,569

Intangible assets


20

29

1,172



24,691

20,365

12,741

Current assets

 




Other receivables


1,150

875

1,844

Restricted cash

8

2,075

2,075

2,075

Cash and cash equivalents


1,404

2,754

4,491



4,629

5,704

8,410

Total assets

 

29,320

26,069

21,151

 

 




Current liabilities

 




Trade and other payables

9

(5,540)

(5,229)

(2,070)

Non-current liability

10

(6,802)

(6,231)

(5,571)

Total liabilities

 

(12,342)

(11,460)

(7,641)

 

 




 

 




Net assets

 

16,978

14,609

13,510

 




Equity attributable to equity holders of the company




Share premium


68,343

65,245

60,252

Share reserve


3,041

2,801

2,047

Foreign Currency Translation Reserve


(64)

(276)

(507)

Accumulated deficit


(54,342)

(53,161)

(48,282)

Total shareholder funds

 

16,978

14,609

13,510

 

The accompanying notes from an integral part of these consolidated financial statements.

 

Interim Consolidated Statement of Changes in Equity


 Share premium

Share reserve

FCTR

Accumulated deficit

Total
equity


##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Balance at 1 January 2023

48,128

2,036

-

(49,705)

459

Profit for the period to 30 June 2023 (restated and unaudited)

-

-

-

1,423

1,423

Total comprehensive profit

-

-

-

1,423

1,423







Transactions with equity shareholders of the parent:






Share based payments

-

11

-

-

11

Proceeds from shares issued

12,674

-

-

-

12,674

Cost of share issue

(550)

-

-

-

(550)

Foreign currency translation reserve

-

-

(507)

-

(507)

Balance at 30 June 2023 (restated and unaudited)

60,252

2,047

(507)

(48,282)

13,510

 

 

 

 

 

 

Loss for the period to 31 December 2023 (audited)

-

-

-

(4,879)

(4,879)

Total comprehensive loss

-

-

-

(4,879)

(4,879)







Transactions with equity shareholders of the parent:






Share based payments

-

754

-

-

754

Proceeds from shares issued

5,039

-

-

-

5,039

Cost of shares issue

(46)

-

-

-

(46)

Foreign currency translation reserve

-

-

231

-

231

Balance at 31 December 2023 (audited)

65,245

2,801

(276)

(53,161)

14,609







Loss for the period to 30 June 2024 (unaudited)

-

-

-

(1,181)

(1,181)

Total comprehensive loss

-

-

-

(1,181)

(1,181)







Transactions with equity shareholders of the parent:






Share based payments

-

240

-

-

240

Proceeds from shares issued

3,262

-

-

-

3,262

Cost of share issue

(164)

-

-

-

(164)

Foreign currency translation reserve

-

-

212

-

212

Balance at 30 June 2024 (unaudited)

68,343

3,041

(64)

(54,342)

16,978

 

 

The accompanying notes from an integral part of these consolidated financial statements.

Interim Consolidated Cash Flow Statement


 

Unaudited
30 Jun 2024

Audited
31 Dec 2023

Restated Unaudited 
30 Jun 2023

 

 Notes

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Cash flows from operating activities:

 

 

 

 

Loss before tax


(1,181)

(3,456)

1,423

Adjustments for:

 

 

 

 

Share-based payment


240

765

11

Depreciation on property plant and equipment



426

-

Negative goodwill


-

(3,556)

(3,556)

Tax expense


(946)

1

(324)

Interest paid


-

362

-



 



Change in working capital items:


 



Movement in other receivables


276

227

(1,280)

Movement in trade and other payables


(317)

4,615

1,659

Net cash used in operations

 

(1,928)

(616)

(2,067)



 



Cash flows from investing activities


 



Investment in subsidiary - cash balances acquired

     

-

2,492

2,492

Purchase of property, plant & equipment


-

(9,673)

(1,031)

Net cash flows from investing activities

 

-

(7,181)

1,461

 

 

 

 

 

Cash flows from financing activities

 

 



Proceeds from issue of share capital


3,262

12,570

7,531

Share issue costs


(164)

(596)

(550)

Net cash flows from financing activities

 

3,098

11,974

6,981

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

1,170

4,177

6,375

Effect of exchange rate changes


(2,520)

346

(115)

Cash and cash equivalents at beginning of period


4,829

306

306

Cash and cash equivalents at end of period

 

3,479

4,829

6,566

 

The accompanying notes from an integral part of these consolidated financial statements.

 

Notes to the Interim Consolidated Financial Statements

 

1                 Reporting entity

Beacon Energy plc (the "Company") is domiciled in the Isle of Man. The Company's registered office is at 55 Athol Street, Douglas, Isle of Man IM1 1LA.  These consolidated financial statements comprise the Company and its subsidiaries (together referred to as the "Group"). The Group is primarily involved in the E&P business.  

 

2                 Basis of accounting

These interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting". These interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements for the period ended 31 December 2023, which were prepared in accordance with IFRSs as adopted by the United Kingdom. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.

In preparing these interim financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those disclosed in the Group's statutory financial statements for the year ended 31 December 2023.

Comparative figures for the interim period ended 30 June 2023 have been restated to account for corrections to accounting treatment for the acquisition of Rhein Petroleum GmbH that came about while preparing annual accounts as at 31 December 2023. A reconciliation between originally reported figures and restated figures has not been prepared.

The interim consolidated financial statements are presented in US Dollars unless otherwise indicated.

There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial period beginning on or after 1 January 2024 that would be expected to have a material impact on the Group.

The consolidated financial statements of the Group as at and for the year ended 31 December 2023 are available upon request from the Company's registered office at 55 Athol Street, Douglas, Isle of Man or the Company's website  www.beaconenergyplc.com 

These interim consolidated financial statements have been approved and authorised for issue by the Company's Board of directors on 11 October 2024.

 

3                Going concern

The financial statements have been prepared on a going concern basis.

The Group monitors its cash position, cash forecasts and liquidity on a regular basis and takes a conservative approach to cash management.

As at 30 June 2024, the Company had available cash resources (excluding restricted cash) of US$1.4 million.

Following disappointing production rates from SCHB-2, the Company engaged with approximately 90% of the creditors of Rhein Petroleum with the aim of agreeing a reduction in liabilities and a deferred payment plan based on future cash flow generation of Rhein Petroleum. Unfortunately, agreement with creditors could not be reached and as a result the Company took the decision to place Rhein Petroleum into a formal process with its creditors (akin to US Chapter 11 bankruptcy protection). This three-month process was expected to conclude in early October although it has been extended by the creditor's representative who is exploring

Notes to the Interim Consolidated Financial Statements (continued)

 

options to maximise recovery of value for creditors. As part of this process, the Company has put forward a robust and fully financed restructuring plan aimed at maximising cash generation from the Rhein Petroleum business and delivering value for creditors. A resolution of the creditor process is expected during Q4 2024.

Management's base case is that a suitable agreement will be reached with the creditors of Rhein Petroleum and that, if the stabilised production can be maintained, the Rhein Petroleum business will be self-funding going forward.  

Management have also considered a number of downside scenarios, including scenarios where agreement cannot be reached with creditors, or where production cannot be maintained at the current stabilised rate.

Under the base case forecast, the Group will have sufficient financial headroom to meet forecast cash requirements for the 12 months from the date of approval of these consolidated financial statements. However, in the downside scenarios, in the absence of any mitigating actions, the Group may have insufficient funds to meet its forecast cash requirements. Potential mitigants include deferral and/or reduction of expenditure and raising additional funding.  It should be noted that Beacon Energy has not provided any parent company guarantees related to the debts of Rhein Petroleum.

Accordingly, after making enquiries and considering the risks described above, the Directors have assessed that the cash balance and forecast cash flows provide the Group with adequate headroom for the following 12 months - as a result, the Directors are of the opinion that the Group is able to operate as a going concern for at least the next twelve months from the date of approval of these financial statements.

Nonetheless, these conditions indicate the existence of a material uncertainty which may cast doubt on the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would be required if the Group were unable to continue as a going concern.

 

4          Expenses

Administration fees and expenses consist of the following:


Unaudited
Six months ended
30 Jun 2024

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Audited
Period ended
31 Dec 2023

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Restated Unaudited
Six months ended
30 Jun 2023

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

 Audit fees

21

47

22

-     Professional fees

147

418

172

-     Administration costs (largely associated with acquisition)

60

816

834

-     Employee share based payments

113

19

-

-     Director share based payments (Note 5)

298

1,010

98

-     Directors' fees (Note 5)

334

661

280

-     Travel and entertainment

20

28

17

-     Acquisition amounts written off

-

831

831

 Other administrative expenses

993

3,830

2,254

 

Included in administration costs for the financial year ended 31 December 2023 are costs related to the reverse takeover transaction.

 

Notes to the Interim Consolidated Financial Statements (continued)

 

5          Directors' remuneration

The remuneration of those in office during the period ended 30 June 2024 was as follows:


Unaudited
 Six months ended

30 Jun 2024

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

 

Audited
 Period ended

31 Dec 2023

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Restated Unaudited
 Six months ended

30 Jun 2023

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

 Salaries paid in cash

294

503

171

 Salary deferrals

-

94

96

 Accrued entitlement to shares and warrants

298

1,010

98

 Directors' pension

40

64

13


632

1,671

378

 

Share options and warrants with a value of $298,000 were issued to directors accrued during the 6- month period to 30 June 2024 ($98,000: 30 June 2023). In the period ended 31 December 2023, the warrants issued to advisors accrued with a value of $977,000 ($166,000: 31 December 2022.)

 

6          Business Combination

On 11 April 2023, the Company acquired the entire issued share capital of Rhein Petroleum GmbH, an upstream oil and gas business operating in Germany. This transaction can be best described as a business combination under IFRS3.

The reverse takeover transaction consisted of equity consideration of 3,488,549,633 ordinary shares and an associated consideration of 1,186,953,301 warrants at a price of 0.11 pence which is the fair value per share. On the basis that the net assets acquired exceeded the consideration paid, negative goodwill arose. This negative goodwill has been written off through the profit and loss. Details of the purchase consideration and the net assets acquired are as follows:

Goodwill

 




 Restated

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Consideration transferred at Fair value


5,143

Less: Net identifiable assets at acquisition


18,769

Goodwill at acquisition

 

23,912

Less: Adjustments of loan balance acquired


(27,468)

Goodwill at 31 December 2023

 

(3,556)

 

Net liabilities at fair value:

 

Notes to the Interim Consolidated Financial Statements (continued)

 

Fair value recognised on acquisition

 

 

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Property, plant and equipment

11,743

Receivables

536

Cash and cash equivalents

2,492

Total assets

14,771

Trade payables

(759)

Non-current liabilities

(32,781)

Total liabilities

(33,540)

Total identifiable net liabilities at fair value

(18,769)

 

The Group measured immaterial acquired lease liabilities using the present value of the remaining lease payments at the date of acquisition. The related right-of-use assets were measured at an amount equal to the lease liabilities and adjusted to reflect the favourable terms of the lease relative to market terms.

 

7          Earnings per share

Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.   


Unaudited
Outstanding at 30 Jun
2024

Audited
Outstanding at 31 Dec 2023

Restated Unaudited
Outstanding at 30 Jun 2023

 Gain / (loss) attributable to owners of the Group
(USD thousands)         

(1,181)

(3,456)

1,423

 Weighted average number of ordinary shares in issue (thousands)

16,011,460,248

8,863,248

5,496,704

 Gain / (loss) per share (US cents)

(0.01)

(0.04)

0.03

 

In accordance with International Accounting Standard 33 'Earnings per share', no diluted earnings per share is presented as the Group is loss making.

8          Restricted cash

At reporting date, the Group had US$2,075,000 restricted cash, which is backing guarantees to the mining authority related to future decommissioning. 

9          Trade and other payables

Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value, and subsequently measured at amortised cost

 

Notes to the Interim Consolidated Financial Statements (continued)

using the effective interest method. The increase in trade payables reflects increased spend related to the SCHB-2 well.


Unaudited
Outstanding at 30 Jun
2024

US

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Audited
Outstanding at 31 Dec 2023

US

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Unaudited
Outstanding at 30 Jun 2023

US

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

 

Trade payables

5,262

4,858

1,793

 

Accruals and other payables

278

371

277

 


5,540

5,229

2,070

 

10        Non-current liabilities

The non-current liabilities consist of a loan with Tulip Oil Holding B.V and provisions in relation to future abandonment and decommissioning costs.

 


Unaudited
Outstanding at 30 Jun
2024

US

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Audited
Outstanding at 31 Dec 2023

US

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

Unaudited
Outstanding at 30 Jun 2023

US

##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##
000

 

Tulip Oil Holding loan payable

3,875

3,724

3,433

Provision for decommissioning

2,412

2,412

2,097

Other non-current liabilities

515

95

41

 


6,802

6,231

5,571






 

The loan between Rhein Petroleum GmbH and Tulip Oil Holding B.V. is secured on the shares of Rhein Petroleum GmbH , incurs interest at a rate of 15% and is repayable on 30 June 2025.

The provision for decommissioning is the estimated present value of the amounts required to decommission the Group's oil and gas activities.

11        Shares in issue

The number of shares in issue at the beginning of the period was 13,374,679,620. The number of options and warrants on issue at the start of the period was 3,295,960,536. On 29 February 2024 there was an issue of 5,137,000,000 ordinary shares for £0.05 to raise £2.6 million. The number of ordinary shares in issue at the end of the period is 18,511,679,620. The number of options and warrants at the end of the period is 3,544,360,536.

 

Notes to the Interim Consolidated Financial Statements (continued)

 

Options and warrants in issue:


Outstanding at 31 December 2023

Issued/(Expired) during the period

Outstanding at 30 June 2024

 Options

 

 

 

-     Issued 17/3/2022

30,000,000

-

30,000,000

-     Issued 19/12/2022

770,542,318

-

770,542,318

-     Issued 20/12/2023

503,565,640

-

503,565,640

 

1,304,102,958

-

1,304,102,958

 Warrants

 

 

 

-     Issued 31/03/2021

3,851,159

-

3,851,159

-     Issued 19/04/2021

45,553,120

-

45,553,120

-     Issued 26/07/2022

500,000,000

-

500,000,000

-     Issued 11/04/2023

1,325,753,299

-

1,325,753,299

-     Issued 20/09/2023

116,700,000

-

116,700,000

Issued 28/02/2024

-

248,400,000

248,400,000


1,991,857,578

-

2,240,257,578


 

 

 

 Total options and warrants

3,295,965,536

-

3,544,360,536

 

12        Commitments and contingencies

There were no capital commitments authorised by the Directors or contracted other than those provided for in these financial statements as at 30 June 2024 (31 December 2023: None).

 

13        Subsequent events

On 1 July 2024, the Company requested that trading on AIM for the securities be temporarily suspended.

On 27 August 2024, the Company announced that it had become clear that the electrical submersible pump ("ESP") was running at the lower limit of its operating range - approximately 50 bopd - and as such the SCHB-2 well had not yet been able to achieve a stabilised flow rate. It also announced that plans are well advanced to re-install a rod pump (at a cost of approximately €75,000) to allow a stabilised flow rate to be achieved. This was subsequently installed and a stabilised rate of 50 - 55 bopd achieved.

 

For further information, please visit  www.beaconenergyplc.com  and @BeaconEnergyPlc on Twitter

To register for Beacon Energy's email alerts, please complete the following form:  https://www.beaconenergyplc.com/media-centre/news/#alerts

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.

 

 

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END
 
 
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##PRELOADED_STATE##
##REACT_QUERY_STATE##
##CHUNKS##