http://www.rns-pdf.londonstockexchange.com/rns/7665G_1-2024-3-13.pdf
SYNERGIA ENERGY LTD
ABN 50 078 652 632
INTERIM FINANCIAL REPORT
Six Months Ended 31 December 2023
REVIEW OF OPERATIONS
OVERVIEW AND STRATEGY
Consistent with the Company's strategy to focus on gas production and Carbon Capture and Storage ("CCS"), Synergia's activities have centred on the Company's Cambay gas and condensate field in
Following on from the successful re-frac of the Cambay C-77H well in mid-2022, the Company has continued efforts to enhance production from the well during the Period, thereby facilitating progress towards a full field development. To this end, the Company entered into a Heads of Terms, during the half-year, with Selan Exploration Technology Limited ("Selan"), with a view to farming out up to 50% of the Cambay PSC.
On 14 February 2024, the Company executed a farm out agreement with Selan as detailed below.
The Company was awarded a Carbon Dioxide Appraisal and Storage Licence by the
Cambay Field, Onshore Gujarat, India
(Synergia Energy: Operator and 100% Participating Interest)
The C-77H re-frac operation in mid-2022 indicated an on-going issue of liquid loading in the well, confirming the need for an artificial lift solution for Eocene wells in order to optimise gas and gas condensate production. After due evaluation, a jet pump was installed in September 2023, enabling uninterrupted plateau production from the well.
The jet pump installation on the C-77H well continues to work reliably with production for the month of December 2023 averaging 114,000 SCFD and 4 BPD condensate, the jet pump being operated for 10 hours per day. In addition, the well produced an average of 13-15 BPD of water. After an initial reduction in fluid column height, a recent echometer survey revealed an increase of fluid column height from c. 200m to 300m. It is believed the legacy fracked zones (1-4) are responsible for the water influx with the gas and condensate production coming from the re-frac zones 5 and 6. Mitigation alternatives are being studied, including the re-installation of the bridge plug to isolate frac zones 1-4.
Based on the C-77H re-frac results, the Company believes new multi-zone and fracked horizontal Eocene wells with artificial lift can be drilled with initial production rates of 4 mmscfd and 40% annual decline rates.
A Heads of Terms was entered into on 15 December 2023 with Selan with a view to farming out up to 50% of the Cambay PSC.
On 14 February 2024, the Company executed a Farm Out agreement with Selan:
· The Company agreed to farm out 50% of the 100% interest held by the Synergia Group in the Cambay PSC to Selan.
· Selan, is an Indian oil and gas operator listed on the Bombay Stock Exchange and the National Stock Exchange of
· Synergia and Selan will be joint operators of the Cambay PSC with Selan to be appointed as Lead Joint Operator.
· Both Synergia and Selan are focussed on developing the Cambay PSC Eocene gas and gas condensate reservoir which contains independently certified 2P gas reserves of 206 BCF (as at 1 June 2022).
· The farm-out and associated joint operating agreement are conditional upon customary consents from the Government of
· Synergia and Selan have agreed the form of joint operating agreement for the Cambay PSC and will enter into the joint operating agreement upon receipt of GoI Approval.
· In exchange for the 50% interest, Synergia will be carried by Selan through an agreed
· The WP is to be completed within 18 months of the later of GoI approval of the WP or the award of contracts for the WP, extendable by a further six months in certain circumstances.
· Synergia will receive a cash payment of
· Synergia will retain a 50% interest in the Cambay PSC and a 50% share of the future production and revenues.
· Synergia will be entitled to bonuses of up to
o
o
o
o
o
· Selan has the option to participate in the Cambay CCS scheme on terms to be agreed.
Cambay CCS Scheme
Leveraging its CCS expertise and experience in the
Further technical studies will be required to confirm the suitability of the Olpad Formation. In addition to the securing of funding, the necessary regulatory and commercial frameworks will need to be developed in order to bring this significant CCS scheme to fruition.
United Kingdom Continental Shelf
Carbon Capture and Storage ("CCS")
The Company, together with its joint venture partner Wintershall Dea Carbon Management Solutions
Under the terms of the joint venture with Wintershall Dea Carbon Management Solutions
The CS019 licence award, which covers the former Camelot gas field, marks a significant milestone for the Company's Medway Hub CCS project. The Medway Hub CCS project provides for the capture and transportation of CO2 emissions from coastal Combined-Cycle Gas Turbine power stations in liquid form by marine tanker to a Floating Injection, Storage and Offloading vessel (FISO) from which the CO2 would be injected into depleted gas fields and saline aquifers, which are situated in the
On 21 December 2023 Wintershall DEA's parent company BASF and key shareholder LetterOne announced that it had reached agreement with
The CS019 licence has a work program that incorporates an appraisal phase comprising seismic re-processing, technical evaluations and risk assessment, a contingent FEED study leading to the potential storage license application in 2028 following the final investment decision ("FID"). The Camelot license also includes a contingent appraisal well. First CO2 injection is anticipated for 2029/2030. The Company's share of the initial work phase is subject to funding as would be the FID, to be made in due course.
JPDA 06-103, Timor Sea
In August 2020, on behalf of its Joint Venture Participants, Synergia Energy Ltd announced a Deed of Settlement and Release ("Deed") with the Autoridade Nacional Do Petroleo E Minerais ("ANPM"). Under the terms of the Deed, Synergia Energy committed to a settlement of
To fund the settlement to ANPM, Synergia Energy entered into an unsecured loan facility agreement with two of the JPDA joint venture partners, Japan Energy E&P JPDA Pty Ltd ("JX") and Pan Pacific Petroleum (JPDA 06 103) Pty Ltd ("PPP"). The portion which was owing to PPP was fully repaid in December 2021. The portion which was owing to JX was fully repaid on 10 August 2023 when the Company made its final repayment of
On 13 October 2022, the non-defaulting parties to the JPDA joint venture agreed to terminate the Joint Operating Agreement. During the half-year, Synergia Energy continued the process of progressing the final closure of the joint venture accounts to conclude this matter.
Qualified Person
The technical information contained in the above disclosure has been prepared by or under the supervision of Mr Roland Wessel (BSc (Hons) Geology), CEO and Director employed by Synergia Energy Ltd. Mr Wessel has over 45 years' experience in the oil and gas industry and is a member of the Society of Petroleum Engineers. Mr Wessel meets the requirements of and acts as the Qualified Person under the Alternative Investment Market Rules - AIM Note for Mining and Oil & Gas Companies, and consents to the inclusion of this information in this report in the form and context in which it appears.
PERMIT SCHEDULE
|
PETROLEUM AND CCS PERMIT SCHEDULE - 31 DECEMBER 2023 |
|||||
|
ASSET |
LOCATION |
ENTITY |
CHANGE IN INTEREST DURING THE PERIOD % |
EQUITY % |
OPERATOR |
|
Cambay Field PSC |
|
Synergia Energy Ltd |
- |
85 |
Synergia Energy Ltd |
|
Oilex N.L. Holdings ( |
- |
15 |
|||
|
CS019 - SNS Area 4 (Camelot Area) (1) |
Southern North Sea ( |
Synergia Energy CCS Limited |
50 |
50 |
Synergia Energy CCS Limited |
(1) The NSTA granted the CS019 licence for the Camelot area to Synergia Energy CCS Limited and its 50% joint venture partner, Wintershall Dea Carbon Management Solutions
DIRECTORS' REPORT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2023
The directors present their report together with the condensed interim financial report of the group comprising of Synergia Energy Ltd (the "Company" or "Synergia Energy") and its subsidiaries (together collectively referred to as the "Group") for the half-year ended 31 December 2023 and the auditor's review report thereon. Unless otherwise indicated, the directors' report is presented in Australian dollars ("A$"), which is the Company's functional and presentation currency (see Note 2(a) of the Notes to the Condensed Consolidated Financial Statements).
DIRECTORS
The directors of the Company at any time during the interim period and until the date of this report are detailed below. All directors were in office for this entire period unless otherwise stated.
|
Mr Jonathan Salomon |
Non-Executive Chairman |
|
Mr Roland Wessel |
Chief Executive Officer ("CEO") and Executive Director |
|
Mr Colin Judd |
Chief Financial Officer ("CFO") and Executive Director |
|
Mr Mark Bolton |
Non-Executive Director |
|
Mr Paul Haywood |
Independent Non-Executive Director |
|
Mr Peter Schwarz |
Independent Non-Executive Director and Deputy Chairman (appointed Deputy Chairman from 24 January 2024) |
REVIEW OF OPERATIONS
A review of the operations of the Group during the financial period and the results of those operations are set out in the Review of Operations on pages 1 to 3 of this report.
BOARD UPDATE
After half-year end on 24 January 2024, Mr Schwarz was appointed as Deputy Chairman. There were no other board changes during the period.
ROUNDING OF AMOUNTS
The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the financial report have been rounded to the nearest dollar, unless otherwise indicated.
FINANCIAL AND OPERATING RESULTS
Income Statement
The Group incurred a consolidated loss after income tax of
During the half-year, the Group recognised total revenues from gas and oil sales of
Net revenues from gas sales were
Net revenues from oil sales were
Cost of sales for the half-year were
Expected credit losses ("ECLs") incurred during the half-year were
An impairment of
Net finance income was
Cash Flow
Net cash used in operating activities for the period was
The Group invested
During the period, the Company raised funds net of costs of
The shares issued were from share placements held in July and in December. 704,545,454 shares were from the July share placement, which was issued on 7 August 2023 at
On 10 August 2023, the Company made the final loan repayment to JX of
Cash and cash equivalents were
Financial Position
The net assets of the Group totalled
As at 31 December 2023, the Company had:
· Available cash resources of
· Borrowings (excluding derivative liability component of convertible notes) of
· Derivative liabilities (from convertible notes) of
· Issued capital of 10,497,336,158 fully paid ordinary shares and 463,564,923 unlisted options.
MATERIAL UNCERTAINTY RELATED TO GOING CONCERN
The auditor's review report contains a statement of material uncertainty regarding the Company's ability to continue as a going concern. The consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
The funding requirements of the Group are reviewed on a regular basis by the Group's Executive Directors and are reported to the Board at each board meeting to ensure the Group can meet its financial obligations as and when they fall due.
Until sufficient operating cash flows are generated from its operations, the Group remains reliant on equity raisings, joint venture contributions or debt funding, as well as asset divestitures or farmouts to fund its expenditure commitments.
The Group may require additional funding in due course to continue its activities, including CCS, meet its ongoing working capital requirements (including any loans payable), and for any new business opportunities that the Group may pursue.
Further information on the Group's going concern basis of preparation is provided in Note 2(c) of the consolidated financial statements.
SIGNIFICANT EVENTS AFTER BALANCE DATE
On 5 January 2024, the Company received the last instalment of the December Placement funds of
On 23 January 2024, the Company entered into an additional bank guarantee for
On 24 January 2024, Mr Schwarz was appointed as Deputy Chairman.
On 1 February 2024, one of the Group's inactive entities, Oilex (JPDA 06-103) Ltd, was deregistered. This entity had no assets at the time of deregistration.
On 14 February 2024, the Group entered into an agreement to farm out 50% of the Group's interest in the Cambay PSC to Selan Exploration Technology Limited, in exchange of an agreed
On 28 February 2024, following shareholder approval at a General Meeting held by the Company on 15 February 2024, the Company issued 1,375,000,000 unquoted options to the participants of the December Placement ("December Placement Options") and 82,500,000 unquoted options to Novum Securities Limited ("Novum") pursuant to the capital raising advisory agreement relating to the December Placement ("December Fee Options"). Both the December Placement Options and the December Fee Options are exercisable at
In line with the 9 March 2024 maturity date of the 6,500 convertible loan notes issued by the Company effective 9 March 2023, the Company received notices from five of its seven convertible note holders that indicated their intention to (a) redeem their 5,430 notes and interest accrued into cash, and (b) extend the maturity to 30 September 2024 for 1,750 of the notes. The payments will amount to
On 11 March 2024, the Company announced that it has obtained loan funding from existing investors of
There were no other significant subsequent events occurring after the half-year end.
LEAD AUDITOR'S INDEPENDENCE DECLARATION
The lead auditor's independence declaration is set out on page 9 and forms part of the Directors' Report for the half-year ended 31 December 2023.
Signed in accordance with a resolution of the Board of Directors made pursuant to section 306(3) of the Corporations Act 2001.
|
Mr Peter Schwarz Deputy Chairman |
Mr Roland Wessel Chief Executive Officer and Director |
|
14 March 2024
|
|
PKF Perth
ABN 64 591 268 274
Level 5, 35 Havelock Street,
West Perth WA 6005
PO Box 609,
West Perth WA 6872
+61 8 9426 8999
perth@pkfperth.com.au
pkf.com.au
AUDITOR'S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF SYNERGIA ENERGY LTD
In relation to our review of the financial report of Synergia Energy Ltd for the half year ended 31 December 2023, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
PKF Perth
Shane Cross
Partner
14 March 2024
Level 4, 35 Havelock Street,
PO Box 609,
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2023
|
|
Note |
Half-Year Ended 31 Dec 2023 |
Half-Year Ended 31 Dec 2022 |
|
|
|
A$ |
A$ |
|
|
|
|
|
|
Revenue |
6(a) |
353,168 |
690,820 |
|
Cost of sales |
6(b) |
(741,361) |
(2,380,919) |
|
Gross Loss |
|
(388,193) |
(1,690,099) |
|
|
|
|
|
|
Other income |
6(c) |
10,474 |
- |
|
Exploration, evaluation and appraisal expenditure |
|
(360,405) |
(385,788) |
|
Administration expense |
6(d) |
(1,090,567) |
(1,251,915) |
|
Expected credit losses expense |
7 |
(196,268) |
(22,712) |
|
Share-based payments expense |
19 |
(84,093) |
(84,094) |
|
Impairment of equity securities |
10 |
(34,593) |
- |
|
Other expenses |
6(e) |
(2,840) |
(3,689) |
|
Results from Operating Activities |
|
(2,146,485) |
(3,438,297) |
|
Finance income |
6(f) |
876,331 |
158 |
|
Finance costs |
6(g) |
(811,819) |
(180,650) |
|
Net foreign exchange gain/(loss) |
6(h) |
12,876 |
(56,024) |
|
Net Finance Income/(Costs) |
|
77,388 |
(236,516) |
|
|
|
|
|
|
Loss Before Tax |
|
(2,069,097) |
(3,674,813) |
|
Income tax expense |
|
- |
- |
|
Loss After Tax |
|
(2,069,097) |
(3,674,813) |
|
|
|
|
|
|
Other Comprehensive Income |
|
|
|
|
Items that May be Reclassified |
|
|
|
|
Foreign exchange differences on |
|
(178,680) |
74,357 |
|
Other Comprehensive (Loss)/Income, Net of Tax |
|
(178,680) |
74,357 |
|
|
|
|
|
|
Total Comprehensive Loss |
|
(2,247,777) |
(3,600,456) |
|
|
|
|
|
|
|
|
|
|
|
Loss per Share from Continuing Operations |
|
|
|
|
Basic loss per share (cents per share) |
|
(0.02) |
(0.04) |
|
Diluted loss per share (cents per share) |
|
(0.02) |
(0.04) |
|
|
|
|
|
The above Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
|
|
Note |
31 Dec 2023 |
30 June 2023 |
|
|
|
A$ |
A$ |
|
Assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
1,789,410 |
938,589 |
|
Trade and other receivables |
7 |
369,123 |
220,331 |
|
Prepayments |
|
80,982 |
89,507 |
|
Inventories |
|
70,767 |
113,819 |
|
Total Current Assets |
|
2,310,282 |
1,362,246 |
|
|
|
|
|
|
Development assets |
8 |
17,190,756 |
17,558,182 |
|
Exploration, evaluation and appraisal asset |
9 |
266,480 |
- |
|
Plant and equipment |
|
21,278 |
24,217 |
|
Investments |
10 |
- |
34,593 |
|
Total Non-Current Assets |
|
17,478,514 |
17,616,992 |
|
|
|
|
|
|
Total Assets |
|
19,788,796 |
18,979,238 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Trade and other payables |
11 |
1,123,548 |
485,968 |
|
Provisions |
12 |
267,815 |
174,116 |
|
Borrowings |
13 |
1,108,873 |
774,666 |
|
Derivative financial liability |
14 |
151,560 |
1,050,334 |
|
Total Current Liabilities |
|
2,651,796 |
2,485,084 |
|
|
|
|
|
|
Provisions |
12 |
5,603,471 |
6,156,638 |
|
Total Non-Current Liabilities |
|
5,603,471 |
6,156,638 |
|
|
|
|
|
|
Total Liabilities |
|
8,255,267 |
8,641,722 |
|
|
|
|
|
|
Net Assets |
|
11,533,529 |
10,337,516 |
|
|
|
|
|
|
Equity |
|
|
|
|
Issued capital |
18 |
196,155,938 |
192,817,143 |
|
Reserves |
|
8,226,240 |
8,299,925 |
|
Accumulated losses |
|
(192,848,649) |
(190,779,552) |
|
Total Equity |
|
11,533,529 |
10,337,516 |
The above Condensed Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2023
|
|
|
Attributable to Owners of the Company |
||||
|
|
|
Issued Capital |
Share-Based Payments Reserve |
Foreign Currency Translation Reserve |
Accumulated Losses |
Total Equity |
|
|
Note |
A$ |
A$ |
A$ |
A$ |
A$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 July 2023 |
|
192,817,143 |
534,957 |
7,764,968 |
(190,779,552) |
10,337,516 |
|
|
|
|
|
|
|
|
|
Comprehensive Loss |
|
|
|
|
|
|
|
Loss after tax for the period |
|
- |
- |
- |
(2,069,097) |
(2,069,097) |
|
Other Comprehensive Loss |
|
|
|
|
|
|
|
Foreign currency translation differences |
|
- |
- |
(178,680) |
- |
(178,680) |
|
|
|
|
|
|
|
|
|
Total Comprehensive |
|
- |
- |
(178,680) |
(2,069,097) |
(2,247,777) |
|
|
|
|
|
|
|
|
|
Transactions with |
|
|
|
|
|
|
|
Contributions and Distributions |
|
|
|
|
|
|
|
Shares issued |
18 |
3,571,757 |
- |
- |
- |
3,571,757 |
|
Capital raising costs (1) |
18 |
(232,962) |
- |
- |
- |
(232,962) |
|
Share-based payment transactions |
19 |
- |
104,995 |
- |
- |
104,995 |
|
Total Transactions with |
|
3,338,795 |
104,995 |
- |
- |
3,443,790 |
|
|
|
|
|
|
|
|
|
Balance at 31 December 2023 |
|
196,155,938 |
639,952 |
7,586,288 |
(192,848,649) |
11,533,529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 July 2022 |
|
192,181,384 |
221,321 |
7,577,543 |
(185,396,650) |
14,583,598 |
|
|
|
|
|
|
|
|
|
Comprehensive Income/(Loss) |
|
|
|
|
|
|
|
Loss after tax for the period |
|
- |
- |
- |
(3,674,813) |
(3,674,813) |
|
Other Comprehensive Income |
|
|
|
|
|
|
|
Foreign currency translation differences |
|
- |
- |
74,357 |
- |
74,357 |
|
|
|
|
|
|
|
|
|
Total Comprehensive |
|
- |
- |
74,357 |
(3,674,813) |
(3,600,456) |
|
|
|
|
|
|
|
|
|
Transactions with |
|
|
|
|
|
|
|
Contributions and Distributions |
|
|
|
|
|
|
|
Shares issued for cash |
18 |
608,378 |
- |
- |
- |
608,378 |
|
Capital raising costs (1) |
18 |
27,381 |
- |
- |
- |
27,381 |
|
Share-based payment transactions |
19 |
- |
109,246 |
- |
- |
109,246 |
|
Total Transactions with |
|
635,759 |
109,246 |
- |
- |
745,005 |
|
|
|
|
|
|
|
|
|
Balance at 31 December 2022 |
|
192,817,143 |
330,567 |
7,651,900 |
(189,071,463) |
11,728,147 |
|
|
|
|
|
|
|
|
(1) Capital raising costs include cash payments and the fair value of options granted to the underwriter.
The above Condensed Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2023
|
|
Half-Year Ended 31 Dec 2023 A$ |
Half-Year Ended 31 Dec 2022 A$ |
|
Cash Flows from Operating Activities |
|
|
|
Cash receipts from customers |
509,173 |
467,308 |
|
Recovery of prior period operating costs |
- |
52,539 |
|
Payments to suppliers and employees |
(1,482,286) |
(3,771,568) |
|
Repayment of JPDA 06-103 PSC termination penalty |
- |
(372,523) |
|
Cash outflows from operations |
(973,113) |
(3,624,244) |
|
Payments for exploration, evaluation |
(370,389) |
(442,433) |
|
Interest received |
262 |
158 |
|
Interest paid |
(10,801) |
(4,790) |
|
Net Cash Used in Operating Activities |
(1,354,041) |
(4,071,309) |
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
Payments for capitalised development assets |
(411,477) |
- |
|
Payments for capitalised exploration, |
(163,967) |
- |
|
Net Cash Used in Investing Activities |
(575,444) |
- |
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
Proceeds from issue of share capital |
3,336,352 |
608,378 |
|
Payment for share issue costs |
(212,059) |
(106,168) |
|
Proceeds from borrowings |
- |
372,523 |
|
Repayment of borrowings |
(338,052) |
(199,906) |
|
Net Cash from Financing Activities |
2,786,241 |
674,827 |
|
|
|
|
|
Net Increase/(Decrease) in Cash and Cash Equivalents |
856,756 |
(3,396,482) |
|
Cash and cash equivalents at 1 July |
938,589 |
4,838,459 |
|
Effect of exchange rate fluctuations on cash held |
(5,935) |
(77,554) |
|
Cash and Cash Equivalents at 31 December |
1,789,410 |
1,364,423 |
The above Condensed Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2023
1. REPORTING ENTITY
Synergia Energy Ltd (the "Company") is a for-profit entity domiciled in Australia. The condensed consolidated interim financial report as at and for the half-year ended 31 December 2023 comprise the Company and its subsidiaries (collectively the "Group" and individually "Group Entities"). Synergia Energy Ltd is a company limited by shares incorporated in Australia whose shares are publicly traded on the Alternative Investment Market ("AIM") of the London Stock Exchange ("LSE").
The principal activities of the Group during the financial period included:
· exploration for oil and gas;
· appraisal and development of oil and gas prospects; and
· production and sale of oil and gas.
The Group is also focused on carbon-neutral gas production and aims to become a major contributor to CO2 emission reduction by developing CCS projects, leveraging the extensive management experience in this sector.
There were no significant changes in the nature of the activities during the period.
The consolidated annual financial report of the Group as at and for the year ended 30 June 2023 is available upon request from the Company's registered office at Level 24, 44 St Georges Tce, Perth, Western Australia, 6000, Australia or at www.synergiaenergy.com.
2. BASIS OF PREPARATION
(a) Presentation Currency
The condensed consolidated interim financial report is presented in Australian Dollars ("A$"), unless otherwise stated.
(b) Statement of Compliance
The condensed consolidated interim financial report is a general purpose condensed financial report which has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting (IFRS equivalent: IAS 34 Interim Financial Reporting) and the Corporations Act 2001. The condensed consolidated interim financial report does not include all of the notes and information normally included in an annual financial report and accordingly this report should be read in conjunction with the consolidated annual financial report of the Group as at and for the year ended 30 June 2023.
The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financials/Directors' Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument amounts in the half-year financial report are rounded off to the nearest dollar, unless otherwise indicated.
This condensed consolidated interim financial report was authorised for issue by the Board of Directors on 14 March 2024.
(c) Going Concern Basis
The Directors believe it is appropriate to prepare the consolidated financial statements on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
The Group incurred a loss of
In addition, subsequent to the half-year, the Company received notices from five of its convertible note holders, which indicated their intention to (a) redeem their 5,430 notes and interest accrued into cash, and (b) extend the maturity to 30 September 2024 for 1,750 of the notes. The payments will amount to
On 11 March 2024, the Company also announced that it has obtained loan funding from existing investors of
The
The Group may require further funding within the next twelve months in order to continue its activities, including CCS, meet its ongoing working capital requirements (including any loans payable), and for any new business opportunities that the Group may pursue.
The Directors believe that the Group will be able to secure sufficient funding to meet the requirements to continue as a going concern, due to its history of previous capital raisings, acknowledging that the structure and timing of any capital raising is dependent upon investor support, prevailing capital markets, shareholder participation, oil and gas prices and the outcome of planned exploration, evaluation and appraisal activities, which creates uncertainty.
The Directors consider the going concern basis of preparation to be appropriate based on its forecast cash flows for the next twelve months and that the Group will be in a position to continue to meet its minimum administrative, evaluation and development expenditures and commitments for at least twelve months from the date of this report.
If further funds are not able to be raised or realised, then it may be necessary for the Group to sell or farmout its exploration, evaluation and appraisal and development assets and to reduce discretionary administrative expenditure.
The ability of the Group to achieve its forecast cash flows, particularly the raising of additional funds, represents a material uncertainty that may cast significant doubt about whether the Group can continue as a going concern, in which case it may not be able to realise its assets and extinguish its liabilities in the normal course of business and at the stated amounts in the financial statements.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied by the Group in this condensed consolidated interim financial report are the same as those applied by the Group in its consolidated financial report as at and for the year ended 30 June 2023.
New or Amended Accounting Standards and Interpretations Adopted
The Group has adopted all of the new or amended accounting standards, interpretations and other accounting pronouncements issued by the Australian Accounting Standards Board ("AASB") that are effective for reporting periods beginning on or after 1 January 2023 and therefore mandatory for the current reporting period. The adoption of these accounting standards, interpretations and other accounting pronouncements did not have any significant impact on the financial performance or position of the Group.
Any new or amended accounting standards, interpretations and other accounting pronouncements issued by the AASB that are not yet mandatory for the current reporting period have not been early adopted.
4. ESTIMATES AND JUDGEMENTS
The preparation of a condensed consolidated interim financial report requires management to make judgements, estimates and assumptions 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.
In preparing this condensed consolidated interim financial report, 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 that applied to the consolidated financial report as at and for the year ended 30 June 2023.
5. OPERATING SEGMENTS
The Group has identified its operating segments based upon the internal reports that are reviewed and used by the executive management team in assessing performance and that are used to allocate the Group's resources. There has been no change in the basis of segmentation from the Group's 30 June 2023 annual consolidated financial report.
|
|
India |
JPDA (1) |
Indonesia |
United Kingdom |
Corporate (2) |
Consolidated |
||||||
|
6 Months Ended |
31 Dec 2023 |
31 Dec 2022 |
31 Dec 2023 |
31 Dec 2022 |
31 Dec 2023 |
31 Dec 2022 |
31 Dec 2023 |
31 Dec 2022 |
31 Dec 2023 |
31 Dec 2022 |
31 Dec 2023 |
31 Dec 2022 |
|
|
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
External revenue |
353,168 |
690,820 |
- |
- |
- |
- |
- |
- |
- |
- |
353,168 |
690,820 |
|
Gross Loss |
(388,193) |
(1,690,099) |
- |
- |
- |
- |
- |
- |
- |
- |
(388,193) |
(1,690,099) |
|
Reportable Segment (Loss)/Profit Before |
(949,876) |
(2,037,985) |
(4,081) |
(9,054) |
- |
62,867 |
(8,279) |
(80,304) |
(1,184,249) |
(1,373,821) |
(2,146,485) |
(3,438,297) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net finance income/(costs) |
|
|
|
|
|
|
|
|
|
|
64,512 |
(180,492) |
|
Net foreign exchange gain/(loss) |
|
|
|
|
|
|
|
|
|
|
12,876 |
(56,024) |
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
- |
- |
|
Net Loss for the Period |
|
|
|
|
|
|
|
|
|
|
(2,069,097) |
(3,674,813) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
India |
JPDA (1) |
Indonesia |
United Kingdom |
Corporate (2) |
Consolidated |
||||||
|
|
31 Dec 2023 |
30 June 2023 |
31 Dec 2023 |
30 June 2023 |
31 Dec 2023 |
30 June 2023 |
31 Dec 2023 |
30 June 2023 |
31 Dec 2023 |
30 June 2023 |
31 Dec 2023 |
30 June 2023 |
|
|
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
A$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Assets |
17,553,390 |
18,501,114 |
- |
414 |
- |
- |
266,480 |
- |
1,968,926 |
477,710 |
19,788,796 |
18,979,238 |
|
Segment Liabilities |
6,241,268 |
6,436,301 |
- |
9,199 |
- |
- |
130,743 |
15,568 |
1,883,256 |
2,180,654 |
8,255,267 |
8,641,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were no significant inter-segment transactions during the half-year.
(1) Joint Petroleum Development Area.
(2) Corporate represents a reconciliation of reportable segment revenues, profit or loss and assets to the consolidated figure.
6. REVENUE AND EXPENSES
|
|
Note |
Half-Year Ended 31 Dec 2023 A$ |
Half-Year Ended 31 Dec 2022 A$ |
|
|
|
|
|
|
(a) Revenue |
|
|
|
|
Gas sales |
|
248,931 |
396,767 |
|
Oil sales |
|
104,237 |
294,053 |
|
|
|
353,168 |
690,820 |
|
|
|
|
|
|
(b) Cost of Sales |
|
|
|
|
Production costs |
|
(698,722) |
(2,072,613) |
|
Amortisation of development assets |
|
(2,232) |
(5,865) |
|
Movement in oil stocks inventory |
|
(40,407) |
(302,441) |
|
|
|
(741,361) |
(2,380,919) |
|
|
|
|
|
|
(c) Other Income |
|
|
|
|
Profit from disposal of other assets |
|
10,474 |
- |
|
|
|
10,474 |
- |
|
|
|
|
|
|
(d) Administration Expenses |
|
|
|
|
Employee benefits expense |
|
(552,137) |
(647,592) |
|
Administration expense |
|
(538,430) |
(604,323) |
|
|
|
(1,090,567) |
(1,251,915) |
|
|
|
|
|
|
(e) Other Expenses |
|
|
|
|
Depreciation expense |
|
(2,840) |
(3,689) |
|
|
|
(2,840) |
(3,689) |
|
|
|
|
|
|
(f) Finance Income |
|
|
|
|
Interest income |
|
262 |
158 |
|
Derivative liability - net change in fair value |
|
876,069 |
- |
|
|
|
876,331 |
158 |
|
|
|
|
|
|
(g) Finance Costs |
|
|
|
|
Interest charges on borrowings |
|
(688,770) |
(36,018) |
|
Unwinding of discount on site restoration provision |
|
(123,049) |
(144,632) |
|
|
|
(811,819) |
(180,650) |
|
|
|
|
|
|
(h) Foreign Exchange Loss - Net |
|
|
|
|
Foreign exchange (loss)/gain - realised |
|
(15,354) |
9,920 |
|
Foreign exchange gain/(loss) - unrealised |
|
28,230 |
(65,944) |
|
|
|
12,876 |
(56,024) |
7. TRADE AND OTHER RECEIVABLES
|
|
31 Dec 2023 A$ |
30 June 2023 A$ |
|
Current |
|
|
|
Allocation of Receivables |
|
|
|
Joint venture receivables |
13,963 |
16,205 |
|
Receivable on shares issued (1) |
232,948 |
- |
|
Other receivables |
122,212 |
204,126 |
|
|
369,123 |
220,331 |
|
Joint Venture Receivables |
|
|
|
Joint venture receivables (2) |
243,514 |
49,371 |
|
Provision for expected credited losses (3) |
(229,551) |
(33,166) |
|
|
13,963 |
16,205 |
|
Other Receivables |
|
|
|
Corporate receivables |
151,002 |
234,903 |
|
Provision for expected credited losses |
(28,790) |
(30,777) |
|
|
122,212 |
204,126 |
1) Relates to
2) On 28 July 2023, the Group submitted a
3) A corresponding increase in expected credit losses was recorded as the bank guarantee is to remain in place and will not be received back by the Group as long as the Group holds the Cambay PSC.
The Group considers that there is evidence of impairment if any of the following indicators are present: financial difficulties of the debtor, probability that the debtor will dispute amounts owing and default or delinquency in payment (more than one year old). Each receivable has been assessed individually for recovery, and those deemed to have a low chance of recovery have been fully provided for in the current period. The movement in the Group's provision for expected credit losses ("ECLs") are detailed below. The carrying value of trade and other receivables less ECLs approximates its fair value due to the assessment of recoverability.
|
Movement in Provision for Expected Credit Losses |
|
Half-Year Ended 31 Dec 2023 A$ |
|
Balance at 1 July 2023 |
|
(63,943) |
|
Net ECLs incurred during the period |
|
(196,268) |
|
Effect of movements in exchange rates |
|
1,870 |
|
Balance at 31 December 2023 |
|
(258,341) |
|
Allocation of Provision for Expected Credit Losses |
31 Dec 2023 A$ |
30 June 2023 A$ |
|
Joint venture receivables |
(229,551) |
(33,166) |
|
Other receivables |
(28,790) |
(30,777) |
|
|
(258,341) |
(63,943) |
8. DEVELOPMENT ASSETS
|
Non-Current |
31 Dec 2023 A$ |
30 June 2023 A$ |
|
Allocation of Development Assets |
|
|
|
Cambay development asset |
12,050,212 |
11,832,652 |
|
Cambay restoration asset |
5,140,544 |
5,725,530 |
|
Total Carrying Amounts |
17,190,756 |
17,558,182 |
|
Movement in Cambay Development Asset Carrying Amount |
Half-Year Ended 31 Dec 2023 A$ |
|
|
|
|
|
|
|
Cost |
|
|
Balance at 1 July |
33,391,443 |
|
Additions during the period (1) |
411,477 |
|
Effect of movements in foreign exchange rates |
(502,638) |
|
Balance at 31 December |
33,300,282 |
|
|
|
|
Amortisation and Impairment Losses |
|
|
Balance at 1 July |
(21,558,791) |
|
Amortisation charge for the period |
(2,232) |
|
Effect of movements in foreign exchange rates |
310,953 |
|
Balance at 31 December |
(21,250,070) |
|
|
|
|
Cambay Development Asset Carrying Amount at 31 Dec 2023 |
12,050,212 |
1) During the period,
|
Movement in Cambay Restoration Asset Carrying Amount |
Half-Year Ended 31 Dec 2023 A$ |
|
|
|
|
Cost |
|
|
Balance at 1 July |
5,740,472 |
|
Reduction due to reassessment of restoration provision (2) |
(409,203) |
|
Effect of movements in foreign exchange rates |
(176,243) |
|
Balance at 31 December |
5,155,026 |
|
|
|
|
Amortisation and Impairment Losses |
|
|
Balance at 1 July |
(14,942) |
|
Effect of movements in foreign exchange rates |
460 |
|
Balance at 31 December |
(14,482) |
|
|
|
|
Cambay Restoration Asset Carrying Amount at 31 Dec 2023 |
5,140,544 |
2) During the period, a reassessment was made of the restoration asset and provision, resulting in the reduction of the restoration asset and provision at 31 December 2023 by
|
Total Carrying Amounts |
A$ |
|
At 1 July 2023 |
17,558,182 |
|
At 31 December 2023 |
17,190,756 |
Cambay Field Development Assets
Based upon the Company's impairment assessment at 31 December 2023, no impairment charges were required to be applied to the Cambay Field development assets during the half-year ended 31 December 2023.
9. EXPLORATION, EVALUATION AND APPRAISAL ("EEA") ASSET
|
Non-Current |
31 Dec 2023 A$ |
30 June 2023 A$ |
|
Allocation of EEA Asset |
|
|
|
Relating to CS019 licence for the Camelot area (1) |
266,480 |
- |
|
Total Carrying Amount |
266,480 |
- |
|
Movement in EEA Asset |
Half-Year Ended 31 Dec 2023 A$ |
|
Balance at 1 July |
- |
|
Capitalised EEA expenditure, net of recovery (1) |
266,839 |
|
Effect of movements in exchange rates |
(359) |
|
Balance at 31 December |
266,480 |
1) Effective on 1 August 2023, the NSTA granted the CS019 licence for the Camelot area ("CS019 - SNS Area 4") to Synergia Energy CCS Limited and its 50% joint venture partner, Wintershall Dea Carbon Management Solutions UK ("Wintershall Dea"), with Synergia Energy CCS Limited as operator. Prior to 1 August 2023, all costs incurred pertaining to obtaining the licence was expensed.
EEA assets are reviewed at each reporting date to determine whether there is any indication of impairment. When EEA expenditure does not result in the successful discovery of potentially economically recoverable reserves or other assets, or if sufficient data exists to indicate the carrying amount of the EEA asset is unlikely to be recovered in full, either by development or sale, it is impaired.
Based on a review of key assumptions, no impairment indicators were identified as at 31 December 2023. As such no impairment charges were applied to the EEA asset during the half-year ended 31 December 2023.
10. INVESTMENTS
|
|
31 Dec 2023 A$ |
30 June 2023 A$ |
|
Non-Current Investments |
|
|
|
Equity securities in Armour Energy Limited ("Armour") |
- |
34,593 |
|
|
- |
34,593 |
In November 2023, Armour stopped trading its shares and went into receivership and administration. Armour's creditors also resolved to liquidate Armour on 19 January 2024. These are indicators of impairment and as such, the carrying amount of the Armour investment was fully impaired at 31 December 2023.
11. TRADE AND OTHER PAYABLES
|
|
31 Dec 2023 A$ |
30 June 2023 A$ |
|
Current |
|
|
|
Trade payables |
294,579 |
78,481 |
|
Other payables |
209,724 |
- |
|
Accruals |
619,245 |
407,487 |
|
|
1,123,548 |
485,968 |
Trade and Other Payables
The carrying value of trade and other payables is considered to approximate its fair value due to the short-term nature of these financial liabilities.
12. PROVISIONS
|
|
31 Dec 2023 A$ |
30 June 2023 A$ |
|
Current |
|
|
|
Employee benefits |
192,027 |
174,116 |
|
Site restoration and well abandonment |
75,788 |
- |
|
|
267,815 |
174,116 |
|
Non-Current |
|
|
|
Site restoration and well abandonment |
5,603,471 |
6,156,638 |
|
|
5,603,471 |
6,156,638 |
|
|
|
|
|
Site Restoration and Well Abandonment |
|
|
|
Current |
75,788 |
- |
|
Non-current |
5,603,471 |
6,156,638 |
|
|
5,679,259 |
6,156,638 |
|
Movement in Provision for Site Restoration and Well Abandonment |
Half-Year Ended 31 Dec 2023 A$ |
|
Balance at 1 July |
6,156,638 |
|
Unwinding of discount on site restoration provision |
123,049 |
|
Reduction of provision due to reassessment of restoration asset and provision (1) |
(409,203) |
|
Effect of movements in exchange rates |
(191,225) |
|
Balance at 31 December |
5,679,259 |
1) An adjustment was made during the period due to updates in underlying discount and inflation rates. There were no other adjustments to the key assumptions on estimated expenditures required by the Company to settle its site restoration and well abandonment obligations.
13. BORROWINGS
|
|
31 Dec 2023 A$ |
30 June 2023 A$ |
|
Current |
|
|
|
Unsecured loan ( |
- |
339,902 |
|
Convertible notes (debt component) |
1,108,873 |
434,764 |
|
|
1,108,873 |
774,666 |
The unsecured loan related to an unsecured loan facility agreement for
|
Movement in |
Half-Year Ended 31 Dec 2023 A$ |
|
Balance at 1 July 2023 ( |
339,902 |
|
Interest on facility balance at 11% ( |
4,487 |
|
Final repayment made to lender on 10 August 2023 ( |
(348,853) |
|
Effect of movements in exchange rates |
4,464 |
|
Balance at 31 December 2023 |
- |
Convertible Notes
There are a total of 6,500 unsecured convertible notes on issue at 31 December 2023 and at 30 June 2023, each having a face value of £100. These were issued effective 9 March 2023 for total proceeds of £650,000. The maturity date of the notes was 9 March 2024. The conversion rights associated with the convertible notes were as follows:
· Interest is accrued on the face value of the convertible notes at a rate of 5% per annum until such time as the interest is either converted into ordinary shares of the Company or redeemed in cash;
· The holder of the notes may convert the face value of the notes and interest accrued into ordinary shares of the Company at any time between 9 December 2023 and 9 March 2024 at a conversion price of
· If conversion not elected, holders can elect to redeem their convertible notes in cash no earlier than the maturity date of 9 March 2024;
· All holders' must notify the Company of their intention to convert or redeem their convertible notes by 26 February 2024, 10 business days before the maturity date. If no notice is received by the holders by 26 February 2024, the notes and interest accrued will automatically convert into shares in the Company on the maturity date.
No convertible notes were converted into the Company's equity during the half-year period.
|
Movement in Convertible Notes (Debt Component) |
Half-Year Ended 31 Dec 2023 A$ |
|
Balance at 1 July 2023 (£228,251) |
434,764 |
|
Interest on convertible notes at 5% ( |
31,141 |
|
Additional amortised effective interest charge ( |
653,142 |
|
Effect of movements in exchange rates |
(10,174) |
|
Balance at 31 December 2023 (£595,021) |
1,108,873 |
1) In accordance with AASB 9 Financial Instruments (IFRS equivalent: IFRS 9 Financial Instruments).
Subsequent Event
In line with the 9 March 2024 maturity date of the 6,500 convertible loan notes issued by the Company effective 9 March 2023, the Company received notices from five of its seven convertible note holders that indicated their intention to redeem their notes and interest accrued into cash. The holders have a total of 5,430 notes, and requested for 3,680 of its notes, plus interest accrued, to be redeemed in cash effective on the maturity date of 9 March 2024. These payments will amount to
The holders requested for the other 1,750 notes, plus interest accrued, to be redeemed in cash with an extended maturity date of 30 September 2024. This payment will amount to £188,688 (
The Company also received a notice from another of the convertible note holders indicating his intention to convert his 320 notes and interest into 42,005,479 ordinary shares of the Company effective 9 March 2024. The remaining convertible note holder did not provide any option or exercise notice to the Company by the exercise date and, in accordance with the convertible note agreement, the remainder of the 750 convertible notes plus interest will automatically convert into 98,450,342 ordinary shares of the Company effective 9 March 2024.
The total shares from the conversion of the 1,070 convertible notes plus interest, being 140,455,821 ordinary shares, are expected to be issued, and admitted to trading on AIM, on or before 9 April 2024.
On 11 March 2024, the Company also announced that it has obtained loan funding from existing investors of
1) When translated at half-year end GBP to AUD foreign exchange rate of 0.5366.
14. DERIVATIVE FINANCIAL LIABILITY
|
|
31 Dec 2023 A$ |
30 June 2023 A$ |
|
Current |
|
|
|
Convertible notes (derivative liability |
151,560 |
1,050,334 |
|
|
151,560 |
1,050,334 |
|
Movement in Convertible Notes (Derivative Liability Component) |
Half-Year Ended 31 Dec 2023 A$ |
|
Balance at 1 July 2023 (£551,425) |
1,050,334 |
|
Change in fair value (reduction of |
(876,069) |
|
Effect of movements in exchange rates |
(22,705) |
|
Balance at 31 December 2023 (£81,327) |
151,560 |
The holders of the convertible notes had the option to convert the notes into ordinary share capital of the Company. This option was effective on 9 December 2023 and expired on 9 March 2024. See Note 13 for further details, including the notices of intention by five of the convertible note holders to redeem their notes, plus accrued interest, into cash. One of the convertible note holders also gave his notice to the Company indicating his intention to convert his 320 notes and interest into ordinary shares. The remaining convertible notes will automatically convert into ordinary shares effective 9 March 2024 in accordance with the convertible note agreement.
Fair Value Measurement
The fair value measurement of the derivative liability component has been determined using a three-level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets that the Group can access at the measurement date;
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly; and
Level 3: Unobservable inputs for the liability.
The derivative liability is determined to be Level 2 and has been valued using quoted market prices at the end of the reporting period. This valuation technique maximises the use of observable market data where it is available and relies as little as possible on entity specific estimates.
15. LEASES
Short-Term Rental Lease Commitments
Non-cancellable operating lease rentals are payable as follows:
|
|
31 Dec 2023 A$ |
30 June 2023 A$ |
|
Within one year |
13,757 |
29,626 |
|
One year or later and no later than five years |
- |
- |
|
|
13,757 |
29,626 |
The Group continues its lease at its Indian office premises in Vadodara, Gujarat. The lease's lock-in period ended during the half-year on 11 December 2023, and continues on a 3-month rolling basis until 11 December 2025. After 11 December 2025, the Group has the option to negotiate an extension to the lease at a 12% rent increment, with other terms yet to be determined between the Group and the lessor should this option be taken up.
Expenses Related to Short-Term or Low Value Leases
|
|
Half-Year Ended 31 Dec 2023 A$ |
Half-Year Ended 31 Dec 2022 A$ |
|
|
|
|
|
Operating lease rentals expensed during the half-year |
36,800 |
36,737 |
16. EXPENDITURE COMMITMENTS
Exploration, Evaluation and Appraisal Expenditure Commitments
In order to maintain rights of tenure to exploration, evaluation and appraisal permits, the Group is required to perform exploration, evaluation and appraisal work to meet the minimum expenditure requirements specified by various state and national governments. These obligations are subject to renegotiation when an application for an exploration, evaluation and appraisal permit is made and at other times. These obligations are not provided for in the financial report. The expenditure commitments are currently estimated to be A$nil (30 June 2023: A$nil).
When obligations expire, are re-negotiated or cease to be contractually or practically enforceable, they are no longer considered to be a commitment.
Further expenditure commitments for subsequent permit periods are contingent upon future exploration, evaluation and appraisal results. These cannot be estimated and are subject to renegotiation upon the expiry of the existing exploration, evaluation and appraisal leases.
Cambay Field
For the extended Cambay PSC period (which started from September 2019), the Group is required to submit a bank guarantee equivalent to 10% of total estimated annual expenditure in respect to the work programme approved by MOPNG of the Government of India. On 28 July 2023, the Group submitted a
The bank guarantee amounts include a 15% portion which is guaranteed on behalf of OHIL for its share of the bank guarantee.
Required bank guarantee amounts are reassessed every year according to aspects of the work programme that have been fulfilled during the year, and according to aspects of the work programme that is planned to be fulfilled for the relevant upcoming year. This reassessment by MOPNG is expected to happen in the next few months.
There are no other commitments for the Cambay PSC that is not disclosed elsewhere in this report.
CCS Licence on Camelot Area
Effective on 1 August 2023, the NSTA granted the CS019 licence for the Camelot area ("CS019 - SNS Area 4") to Synergia Energy CCS Limited and its 50% joint venture partner, Wintershall Dea Carbon Management Solutions UK ("Wintershall Dea"), with Synergia Energy CCS Limited as operator. The carbon storage licence has a work program that incorporates an appraisal phase comprising seismic re-processing, technical evaluations and risk assessment, and a contingent FEED study leading to a potential storage licence application in 2028, following the final investment decision ("FID"). The CS019 licence also includes a contingent appraisal well. The Group had no other commitments for the CCS licence at half-year end.
Capital Expenditure Commitments
The Group had no capital expenditure commitments as at 31 December 2023 (30 June 2023: A$nil).
17. CONTINGENT ASSETS, CONTINGENT LIABILITIES AND GUARANTEES
Contingent Assets and Contingent Liabilities at Reporting Date
The Directors are of the opinion that there were no contingent assets or contingent liabilities as at 31 December 2023 and as at 30 June 2023.
Guarantees
Synergia Energy Ltd has issued a guarantee in relation to corporate credit cards. The bank guarantee amounts to
During the period on 27 July 2023, Synergia Energy Ltd also entered into a bank guarantee for
18. ISSUED CAPITAL
|
|
Half-Year Ended 31 December 2023 |
Year Ended 30 June 2023 |
||
|
|
Number of |
Issued Capital A$ |
Number of |
Issued Capital A$ |
|
Shares |
|
|
|
|
|
On issue 1 July |
8,417,790,704 |
192,817,143 |
8,242,959,310 |
192,181,384 |
|
Issue of share capital |
|
|
|
|
|
Shares issued for cash (1) (2) |
1,923,295,454 |
3,336,352 |
174,831,394 |
608,378 |
|
Shares issued for (cash to be received) (2) |
156,250,000 |
235,405 |
- |
- |
|
Capital raising costs (3) |
- |
(232,962) |
- |
27,381 |
|
Balance at 31 December / 30 June |
10,497,336,158 |
196,155,938 |
8,417,790,704 |
192,817,143 |
Refer to the following footnotes for additional information of the issue of ordinary shares and Note 19 for details of unlisted options:
1) On 7 August 2023, the Company issued 704,545,454 shares at
2) On 19 December 2023, the Company issued 1,375,000,000 shares at
As part of this placement, the Company also issued 1,375,000,000 unquoted options to the participants of this placement ("December Placement Options") and 82,500,000 unquoted options to Novum pursuant to the capital raising advisory agreement relating to this placement ("December Fee Options"). Both the December Placement Options and the December Fee Options are exercisable at
3) Included in capital raising costs is an amount of
The Company does not have authorised capital or par value in respect of its issued shares. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
Subsequent Event
As mentioned previously, on 28 February 2024, following shareholder approval at the Company's General Meeting on 15 February 2024, the Company issued 1,375,000,000 December Placement Options and 82,500,000 December Fee Options. Both the December Placement Options and the December Fee Options are exercisable at
19. SHARE-BASED PAYMENTS ("SBP")
|
|
Half-Year Ended 31 Dec 2023 A$ |
Half-Year Ended 31 Dec 2022 A$ |
|
Shares and Options - Equity Settled |
|
|
|
Executive Directors - long-term incentive options (1) |
84,093 |
84,094 |
|
Total SBP expense and amount recognised in Profit or Loss |
84,093 |
84,094 |
|
|
|
|
|
SBP Recognised Directly in Equity |
|
|
|
Options granted to brokers during the period (2) |
20,902 |
25,152 |
|
Total SBP recognised directly in equity |
20,902 |
25,152 |
|
|
|
|
|
Total SBP Transactions |
104,995 |
109,246 |
Refer to the following footnotes for additional information on SBP transactions during the period:
1) Relates to 324,675,324 unlisted options which were issued to Executive Directors (Messrs Salomon, Wessel and Judd) on 12 August 2022, following the Company's General Meeting held on 13 July 2022. The options are exercisable at
The total fair value of the unlisted options issued to Executive Directors (
|
Grant Date |
Vesting Date |
Expiry Date |
Fair Value Per Option |
Exercise Price |
Price of Shares on Grant Date |
Expected Volatility |
Risk Free Interest Rate |
Dividend Yield |
|
13 Jul 2022 |
As indicated above |
12 Aug 2027 |
|
|
|
75.15% |
1.35% |
- |
To date,
2) On 26 September 2023, the Company issued 13,636,363 unquoted July Fee Options to Novum pursuant to the capital raising advisory agreement relating to the July Placement. The options are exercisable at
The following factors and assumptions were used to determine the fair value of the July Fee Options granted to Novum during the period:
|
Grant Date |
Vesting Date |
Expiry Date |
Fair Value Per Option |
Exercise Price |
Price of Shares on Grant Date |
Expected Volatility |
Risk Free Interest Rate |
Dividend Yield |
|
7 Aug 2023 |
7 Aug 2023 |
31 July 2026 |
|
|
|
110.67% |
4.10% |
- |
The options have not been exercised at the half-year report date.
3) No other options were issued during the half-year ended 31 December 2023. The balance of unlisted options at 31 December 2023 was 463,564,923 (30 June 2023: 449,928,560 options), as shown in the schedule below:
|
|
|
Exercise |
Balance at 1 July 2023 |
Issued During the Period |
Options Expired |
Balance at 31 Dec 2023 |
|
Issue Date |
Expiry Date |
Price |
No. |
No. |
No. |
No. |
|
19 Jan 2022 |
31 May 2024 |
|
25,210,084 |
- |
- |
25,210,084 |
|
12 Aug 2022 |
12 Aug 2027 |
|
324,675,324 |
- |
- |
324,675,324 |
|
13 Sep 2022 |
30 Apr 2024 |
|
30,000,000 |
- |
- |
30,000,000 |
|
3 Apr 2023 |
1 Apr 2028 |
|
70,043,152 |
- |
- |
70,043,152 |
|
26 Sep 2023 |
31 July 2026 |
|
- |
13,636,363 |
- |
13,636,363 |
|
|
|
|
449,928,560 |
13,636,363 |
- |
463,564,923 |
20. RELATED PARTY TRANSACTIONS
Arrangements with related parties continue to be in place. For details of these arrangements, refer to the consolidated annual financial report of the Group as at and for the year ended 30 June 2023.
No further related party arrangements were made during the period to 31 December 2023.
21. CHANGE IN THE COMPOSITION OF THE GROUP
Subsequent to half-year end, one of the Group's inactive entities, Oilex (JPDA 06-103) Ltd, was deregistered on 1 February 2024. This entity had no assets at the time of deregistration.
There have been no other changes in the composition of the Group since the last annual reporting date.
22. SUBSEQUENT EVENTS
On 5 January 2024, the Company received the last instalment of the December Placement funds of
On 23 January 2024, the Company entered into an additional bank guarantee for
On 24 January 2024, Mr Schwarz was appointed as Deputy Chairman.
On 1 February 2024, one of the Group's inactive entities, Oilex (JPDA 06-103) Ltd, was deregistered. This entity had no assets at the time of deregistration.
On 14 February 2024, the Group entered into an agreement to farm out 50% of the Group's interest in the Cambay PSC to Selan Exploration Technology Limited, in exchange of an agreed
On 28 February 2024, following shareholder approval at the Company's General Meeting on 15 February 2024, the Company issued 1,375,000,000 December Placement Options to the participants of the December Placement and 82,500,000 December Fee Options to Novum pursuant to the capital raising advisory agreement relating to the December Placement. Both the December Placement Options and the December Fee Options are exercisable at
In line with the 9 March 2024 maturity date of the 6,500 convertible loan notes issued by the Company effective 9 March 2023, the Company received notices from five of its seven convertible note holders that indicated their intention to (a) redeem their 5,430 notes and interest accrued into cash, and (b) extend the maturity to 30 September 2024 for 1,750 of the notes. The payments will amount to
On 11 March 2024, the Company announced that it has obtained loan funding from existing investors of
Other than the above disclosures, there has not arisen in the interval between the end of the financial period and the date of this report an item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial periods.
DIRECTORS' DECLARATION
In the opinion of the Directors of Synergia Energy Ltd (the Company):
1. the condensed consolidated financial statements and notes set out on pages 10 to 32, are in accordance with the Corporations Act 2001 including:
(a) giving a true and fair view of the Group's financial position as at 31 December 2023 and of its performance for the half-year ended on that date; and
(b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
2. there are reasonable grounds to believe that the Group and the Company will be able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of the Board of Directors made pursuant to section 303(5) of the Corporations Act 2001.
|
|
|
|
Mr Peter Schwarz Deputy Chairman |
Mr Roland Wessel Chief Executive Officer and Director |
West Perth
Western Australia
14 March 2024
PKF Perth
ABN 64 591 268 274
Level 5, 35 Havelock Street,
West Perth WA 6005
PO Box 609,
West Perth WA 6872
Australia
+61 8 9426 8999
perth@pkfperth.com.au
pkf.com.au
INDEPENDENT AUDITOR'S REVIEW REPORT
TO THE MEMBERS OF SYNERGIA ENERGY LTD
Report on the Half-Year Financial Report
Conclusion
We have reviewed the half-year financial report of Synergia Energy Ltd (the company) and controlled entities (consolidated entity) which comprises the consolidated statement of financial position as at 31 December 2023, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, and notes to the financial statements, including material policy information and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at 31 December 2023, or during the half year.
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the accompanying half-year financial report of Synergia Energy Ltd is not in accordance with the Corporations Act 2001 including:
(a) giving a true and fair view of the consolidated entity's financial position as at 31 December 2023 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
Basis for Conclusion
We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity. Our responsibilities are further described in the Auditor's Responsibilities for the Review of the Financial Report section of our report.
Material Uncertainty Related to Going Concern
Without qualifying our conclusion, we draw attention to Note 2(c) in the financial report in which indicates that the consolidated entity incurred a net loss of
Independence
We are independent of the company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
Directors' Responsibility for the Interim Financial Report
The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with the Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
Auditor's Responsibilities for the Review of the Financial Report
Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's financial position as at 31 December 2023 and its performance for the half year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporation Regulations 2001.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
PKF Perth
Shane Cross
Partner
14 March 2024
PKF Perth is a member of PKF Global, the network of member firms of PKF International Limited, each of which is a separately owned legal entity and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm(s). Liability limited by a scheme approved under Professional Standards Legislation.
DEFINITIONS
|
Associated Gas |
Natural gas found in contact with or dissolved in crude oil in the reservoir. It can be further categorised as Gas-Cap Gas or Solution Gas. |
|
Barrels/Bbls |
Barrels of oil or condensate - standard unit of measurement for all oil and condensate production. One barrel is equal to 159 litres or 35 imperial gallons. |
|
BBO |
Billion standard barrels of oil or condensate. |
|
BCF |
Billion cubic feet of gas at standard temperature and pressure conditions. |
|
BCFE |
Billion cubic feet equivalent of gas at standard temperature and pressure conditions. |
|
BOE |
Barrels of Oil Equivalent. Converting gas volumes to the oil equivalent is customarily done on the basis of the nominal heating content or calorific value of the fuel. Common industry gas conversion factors usually range between 1 barrel of oil equivalent ("BOE") = 5,600 standard cubic feet ("scf") of gas to 1 BOE = 6,000 scf. (Many operators use 1 BOE = 5,620 scf derived from the metric unit equivalent 1 m³ crude oil = 1,000 m³ natural gas). |
|
BOEPD |
Barrels of oil equivalent per day. |
|
BOPD |
Barrels of oil per day. |
|
CCGT |
Combined cycle gas turbines. |
|
CCS |
"Carbon Capture and Sequestration" or "Carbon Capture and Storage". |
|
CO2 |
Carbon dioxide. |
|
Contingent Resources |
Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality. Contingent Resources are further categorised in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterised by their economic status. |
|
Discovered in place volume |
Is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. |
|
FEED |
Front End Engineering Design. |
|
FISO |
Floating injection, storage and offloading. |
|
GOI |
The Government of India. |
|
GOR |
Gas to oil ratio in an oil field, calculated using measured natural gas and crude oil volumes at stated conditions. The gas/oil ratio may be the solution gas/oil, symbol Rs; produced gas/oil ratio, symbol Rp; or another suitably defined ratio of gas production to oil production. Volumes measured in scf/bbl. |
|
LNG |
Liquefied natural gas. |
|
mD |
Millidarcy - unit of permeability. |
|
MD |
Measured Depth. |
|
MMbbls |
Million barrels of oil or condensate. |
|
MMBO |
Million standard barrels of oil or condensate. |
|
MMscfd |
Million standard cubic feet (of gas) per day. |
|
MOPNG |
Ministry of Petroleum and Natural Gas, Government of India. |
|
MSCFD |
Thousand standard cubic feet (of gas) per day. |
|
MTa |
Million tonnes per annum. |
|
NSTA |
North Sea Transition Authority. |
|
PI |
Participating Interest. |
|
Prospective Resources |
Those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations. |
|
PSC |
Production Sharing Contract. |
|
Reserves |
Reserves are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Proved Reserves are those quantities of petroleum, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods and government regulations. Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. Possible Reserves are those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recoverable than Probable Reserves. Reserves are designated as 1P (Proved), 2P (Proved plus Probable) and 3P (Proved plus Probable plus Possible). Probabilistic methods: · P90 refers to the quantity for which it is estimated there is at least a 90% probability the actual quantity recovered will equal or exceed. · P50 refers to the quantity for which it is estimated there is at least a 50% probability the actual quantity recovered will equal or exceed. · P10 refers to the quantity for which it is estimated there is at least a 10% probability the actual quantity recovered will equal or exceed. |
|
SCF/BBL |
Standard cubic feet (of gas) per barrel (of oil). |
|
SCFD |
Standard cubic feet (of gas) per day. |
|
TCF |
Trillion cubic feet of gas at standard temperature and pressure conditions. |
|
Tight Gas Reservoir |
The reservoir cannot be produced at economic flow rates or recover economic volumes of natural gas unless the well is stimulated by a large hydraulic fracture treatment, a horizontal wellbore, or by using multilateral wellbores. |
|
UKCS |
The United Kingdom Continental Shelf. |
|
Undiscovered in place volume |
Is that quantity of petroleum estimated, as of a given date, to be contained within accumulations yet to be discovered. |
CORPORATE INFORMATION
|
Directors Jonathan Salomon Non-Executive Chairman Roland Wessel Chief Executive Officer and Executive Director Colin Judd Chief Financial Officer and Director Mark Bolton (B Business) Non-Executive Director Paul Haywood Independent Non-Executive Director Peter Schwarz Independent Non-Executive Director and Deputy Chairman
Company Secretary Ms Anshu Raghuvanshi (FCS, FGIA, LLB) |
|
Stock Exchange Listings Synergia Energy Ltd's shares are listed under the code SYN on the Alternative Investment Market ("AIM") of the London Stock Exchange ("LSE").
AIM Nominated Adviser Strand Hanson Limited 26 Mount Row London W1K 3SQ United Kingdom
AIM Joint Brokers Novum Securities Limited 2nd Floor, 7-10 Chandos Street London W1G 9DQ United Kingdom Panmure Gordon 40 Gracechurch Street London EC3V 0BT United Kingdom |
|
Registered and Principal Office Level 24, 44 St Georges Terrace Perth, Western Australia 6000 Australia Ph. +61 (0)8 9485 3200 Fax +61 (0)8 9485 3290
Postal Address PO Box 255 West Perth, Western Australia 6872 Australia
India Operations - Gujarat Project Office 2nd Floor, Shreeji Complex Next to Rituraj Complex Vasna Road, Village Akota Vadodara - 390015 Gujarat, India. |
|
Share Registries The Office of the Depositary Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS13 8AE United Kingdom Ph. +44 (0) 370 707 1210 Website: www.computershare.com/uk Computershare Investor Services Pty Limited Level 17 221 St Georges Terrace Perth, Western Australia 6000 Australia Ph: 1300 850 505 (within Australia) Ph: +61 (0)3 9415 4000 (outside Australia) Website: www.computershare.com/au
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|
|
|
Website
synergiaenergy@synergiaenergy.com
|
|
Auditors PKF Perth Level 5, 35 Havelock Street West Perth, Western Australia 6005 Australia |
|
Synergia Energy Ltd ACN 078 652 632 ABN 50 078 652 632 |
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