DORIEMUS PLC - Half-year Report

DORIEMUS PLC - Half-year Report

DORIEMUS PLC - Half-year Report

PR Newswire

 29 September 2016

Doriemus PLC

(“Doriemus” or the “Company”)

Unaudited Interim Results for the six months to 30 June 2016

Doriemus PLC (ISDX: DOR), the London quoted UK focused oil and gas production and exploration company, today announces its unaudited interim results for the 6-month period ended 30 June 2016.

This has been a very exciting period for advancement of the Company’s UK onshore oil and gas assets in the Weald Basin south of London, in particular, the results of the Horse Hill - 1 (“HH-1”) well near Gatwick Airport – affectionately nicknamed the “Gatwick Gusher”. Doriemus now has three exciting onshore oil projects in the Weald Basin and one on the Isle of Wight, for which, the Weald Basin projects will benefit from new geological knowledge learnt from drilling and testing HH-1.

David Lenigas, Executive Chairman of Doriemus, commented: "As your new Executive Chairman, I am pleased to be heading up your Company as we head towards drilling the exciting Brockham sidetrack well into the Portland Sandstone and Kimmeridge limestones later this year, the long term flow testing at Horse Hill and participating in a potential new well at the Lidsey Oil Field next year. The exit of the UK from the European Union, in the Company’s view, makes the resurgence of UK domestic oil production even more important than previously and Doriemus is looking forward to participating in this much needed home grown industry.”

Strategic Review for the Period:

Horse Hill – Weald Basin, UK:

Doriemus owns a 10% direct interest in Horse Hill Developments Limited (“HHDL”). HHDL is a special purpose company that owns a 65% participating interest and operatorship of Licence PEDL137 and the adjacent Licence PEDL246 in the UK Weald Basin.

To the dismay of many commentators and academics in the UK, the year kicked off with the very successful flow testing of the Company’s Horse Hill -1 (“HH-1”) well discovery near Gatwick Airport. This well, proved beyond doubt, that there is flowable high quality oil in the Kimmeridge limestones, having previously been derided publicly by some UK academics as being too immature to host moveable oil. The HH-1 results have not only vindicated the Company’s investment decisions to be an active partner in the Horse Hill Licences, but increases the significance of the Kimmeridge potential in Doriemus’ Brockham oil field in the Weald (see Outlook Section below for the potential of the Brockham oil field).

As reported in March, the final total aggregate stable dry oil flow rate from two Kimmeridge limestones plus the overlying Portland sandstone in HH-1 stands at 1,688 barrels of oil per day (“bopd”), a UK record for an onshore discovery well. Over the 30 to 90 hour flow periods from each of the 3 zones in HH-1, no clear indication of any reservoir pressure depletion was observed. 

Flow Test Highlights:

  • The final Portland test of 323 bopd, over an 8.5-hour, period is the highest stable dry oil flow rate from any onshore UK Portland well. On further testing, with a larger pump, the rate doubled from the previously reported stable dry oil rate of 168 bopd. The Portland was produced at maximum pump capacity and showed no clear indication of depletion. It is likely that the peak rate can be further increased using a higher capacity downhole pump during the next planned test.
  • Proof that the Kimmeridge limestones contain significant volumes of moveable light oil that can be flowed to surface at commercial rates.
  • The stable dry-oil flow rate of 464 bopd from the Lower Kimmeridge Limestone is the first ever flow from this rock unit in the Weald Basin and onshore UK.
  • Based on the analysis of published reports, sighted by the Directors, from all significant UK onshore discovery wells, the Company Directors’ concludes that the well's 1,688 bopd is likely the highest aggregate stable dry-oil flow from any onshore UK new field discovery well.
  • Based on the analysis of published reports from all significant UK onshore discovery wells, the Company Directors’ concludes that the 901 bopd from the Upper Kimmeridge zone is likely the highest stable natural dry oil flow rate from a single reservoir in any UK onshore new field discovery well.
  • High quality Brent Crude produced: light, sweet oil (40 degrees API in Kimmeridge, 35-37 degrees API in Portland) with 1,940 barrels delivered to the Esso Fawley refinery.
  • Preliminary analysis confirms that the Lower and Upper Kimmeridge Limestone units are naturally fractured reservoirs with high deliverability.
  • Strong possibility for further optimisation and increased flow rates from all 3 zones in future development and production wells, particularly through the use of horizontal wells.

Summary Table of Test Results: Horse Hill -1 well – Weald Basin, UK

Zone Maximum Instantaneous Oil Rate Stabilised Dry Oil Rate Perforated Interval Stabilised Flow Period Depth Below Surface
bopd bopd ft hours ft
U. Portland * 360 323 103 8.5 2000
U. Kimmeridge ** 1008 901 88 4.0 2800
L. Kimmeridge ** 700 464 80 7.5 2950
Total 2068 1688 271 20
Note: * flow rate limited by pump stroke rate capacity ** natural flow

HH-1 Overview and Recap:

The HH-1 discovery well, completed in November 2014, was the first modern well since the 1980s to test the entire Jurassic and Triassic section of the Weald Basin, reaching Palaeozoic basement at circa 8,500 feet. The well was drilled with oil-based mud to ensure good electric log data collection. A comprehensive suite of modern Schlumberger log data, including magnetic resonance data, was acquired. Geological samples were collected at 10 foot intervals throughout the well specifically for geochemical analysis.

The analysis of thermal maturity data (vitrinite reflectance) from geological samples, by a leading analyst in Switzerland, showed that the Kimmeridge section of the well was within the peak oil generative window. Previous researchers had stated that the Kimmeridge was thermally immature, and whilst recognised to be the time equivalent of the North Sea's main oil source rock, had likely only generated either early stage immoveable bitumen or minor quantities of moveable oil, as seen in the Upper Kimmeridge Limestone in Balcombe-1, 15 km to the south of HH-1.

As previously announced by UK Oil & Gas PLC (“UKOG”), geochemical analysis of samples throughout the c. 1300 feet thick Kimmeridge shale section of HH-1, showed that the shales comprised a world class oil source rock. Analysis of 277 samples showed 780 feet of drilled section exceeding 2% total organic carbon ("TOC") by weight, with an average of 4.1% TOC. The richest section, and possible sweet-spot, lay between the Upper and Lower Kimmeridge Limestones with an average of 5% TOC and a high of 9.4% TOC. The organic shales demonstrated high oil generative potentials ranging from an average of 35 kg/tonne to a high of 103 kg/tonne and with high Hydrogen Indices ("HI") averaging 754. Further significant potential source rock sections were identified in the Middle Jurassic and Lias sections of the well.

Both Nutech and Schlumberger, leaders in the field of electric log analysis in rocks with low permeabilities, were then engaged by UKOG to investigate the presence of oil in the HH-1 well. UKOG reported the results during 2015, which indicated that a mean estimated total of between 9.97 and 10.99 billion barrels of OIP, or oil in the ground, existed under the HH-1 licence area, contained in shales and limestones of the Kimmeridge, Oxford Clay and Lias.

Brockham Oil Field:

(10% interest, operated by Angus Energy)

The Brockham Oil Field (“Brockham”), in the Weald Basin, is held under UK Production Licence PL235. The Operator Angus Energy advised that the January 2016 production rate was 24 bopd before the well was shut in. Brockham production has been temporarily suspended to allow for significant upgrades to the production site in readiness for a planned sidetrack well designed to test the Portland sandstones and the Kimmeridge limestones shown to produce oil at the nearby Horse Hill - 1 well.

Subsequent Events and Outlook:

Horse Hill:

The operator at Horse Hill, HHDL, have advised that it is seeking regulatory permissions to conduct extended production tests from all 3 oil zones at the site, followed by a horizontal side-track in the Kimmeridge limestones and a new Portland appraisal and development well.

Brockham Oil Field:

On 13 September 2016, the Company announced that US-based Nutech Ltd ("Nutech"), one of the world's leading companies in petrophysical analysis and reservoir intelligence, had independently assessed the Brockham-1 well. Drilled by BP in 1987 under UK Production License PL 235, this Weald Basin well sits approximately 6 miles north west of Gatwick Airport, with an estimated total oil in place (“OIP”) of 281.7 million barrels of oil (“MMBO”) per square mile inclusive of all reservoirs within the well.

The Executive Summary of the Nutech Report (“Nutech Report”) on the Brockham-1 well and the complete Nutech Report can be seen on the Company’s website.

In comparison, Nutech’s previous reported OIP assessment of the the nearby Horse Hill-1 well (“HH-1”), located approximately 4.5 miles from the Brockham play, reported a total of 158 MMBO OIP per square mile last year. This excluded the previously reported Upper Portland Sandstone oil discovery previously announced on 9 April 2015. The flow testing of the HH-1 well, as announce on 21 March 2016, reported a total aggregate stable dry oil flow rate of 1,688 barrels of oil per day from two of the three Kimmeridge Limestones and the Portland Sandstone. The pay zones successfully flow tested at HH-1 in February and March this year are similar to those seen in the Brockham-1 well.

The operator, Angus Energy Limited (“Angus Energy”), has advised production from Brockham has been temporarily suspended pending a significant upgrade on its field surface facilities for continued long term production from the site and to prepare for new oil production from a planned sidetrack production well to be drilled before the end of 2016.

In addition to the abandonment of the well-bores, a side-track will be drilled to enhance production from the Portland sandstones and asses the hydrocarbon potential in the Kimmeridge limestone layers that have tested so successfully at the adjacent Horse Hill-1 well.  Doriemus is optimistic of the oil potential of the Kimmeridge limestones at Brockham considering its close proximity to Horse Hill. 

Lidsey Oil Field:

At Lidsey Oil Field, the operator Angus Energy, have informed the partners that it has started the regulatory approval process to drill a new oil producer. The objective is to drill a new well targeting the crest of the Oolite reservoir and drill a near horizontal 1,500ft section through the reservoir to increase production from the reservoir to potentially more than 300 barrels of oil per day, as advised by Angus Energy.

Isle of Wight:

(5% interest, operated by UK Oil & Gas Investments Plc)

On 10 August 2016, the Company announced it had agreed to acquire all of the rights Angus Energy Holdings UK Limited ("Angus") had in respect of its 5% legal and beneficial interest in the 200 km2 onshore Isle of Wight oil and gas licence (PEDL 331) together with all of Angus' rights in respect of its 5% interest in the joint operating agreement to be entered into between UK Oil & Gas Investments Plc, Solo Oil Plc and Angus.

The UK Oil & Gas Authority has confirmed the award of United Kingdom Production Licence PEDL 331 ("PEDL 331") in the Isle of Wight ("Licence") to the following parties with the percentage interests set opposite their names: UK Oil & Gas Plc (65 percent), Solo Oil Plc (30 percent) and Angus (5 percent). The Oil & Gas Authority are in the process of issuing the final form of licence to the parties and that licence issue is expected to be granted soon.

Cautionary Statement:

All of the reviews and reports mentioned above state that the OIP volumes estimated should not be construed as recoverable resources or reserves. All technical information referred to in this statement has been previously verified by qualified personnel – Please refer to previous news releases made by Doriemus.

Public Trading Platform for the Company’s shares:

On 15 March 2016, the Company's ordinary shares commenced trading on the ISDX Growth Market under the ticker DOR and ceased trading on the London AIM market.

Financing – Rights Issue and Open Offer to Shareholders:

On 6th September 2016 the Company announced an Open Offer to raise up to £865,200 (before expenses), Qualifying Shareholders are being offered the opportunity to subscribe for up to 2,471,999,999 Open Offer Shares at a price of £0.00035 (or 0.035 pence per share) per Open Offer Share.

Financial Results:

During the period, the Company made a loss before taxation of £243,000 (6 months ended 30 June 2015: loss £166,000, 12 months ended 31 December 2015: loss £310,000). There was a weighted loss per share of 0.003p (30 June 2015: loss per share 0.002p, 31 December 2015: loss per share 0.004p). 

The unaudited interim results to 30 June 2016 have not been reviewed by the Company’s auditor.

In Conclusion:

The Board would like to take this opportunity to thank our shareholders, staff and consultants for their continued support and I look forward to reporting further progress over the next period and beyond and Doriemus playing a valuable part in the production of domestic UK oil.

Competent Person’s Statement:

The technical information contained within this report is extracted from Brockham’s Nutech Report, the technical information on Horse Hill has previous been verified by appropriate industry professionals (please refer to previous Company news releases) and the information on the proposed Brockham side track well and Lidsey has been approved by Angus Energy as operator of Brockham and Lidsey. The final contents of this report, with respect to technical information,  have not been verified by a competent person.

David Lenigas


29 September 2016

For further additional information, please contact:

Doriemus plc
David Lenigas / Donald Strang
+44 (0) 20 7440 0640
Peterhouse Corporate Finance Limited
Nominated Adviser
Guy Miller / Fungai Ndore
+44 (0) 20 7469 0930
Optiva Securities Limited
Christian Dennis / Jeremy King
+44 (0) 20 3137 1902
Square1 Consulting
Public Relations
David Bick
+44 (0) 20 7929 5599

Company Statement of Comprehensive Income
Unaudited for the six months ended 30 June 2016

Six months
30 June
Six months
30 June
31 December
£’000 £’000 £’000
Revenue 1 34 57
Cost of Sales (3) (42) (99)
Gross Profit (2) (8) (42)
Administrative expenses (239) (158) (251)
Depletion & impairment charge (2) - (4)
(Loss) from operations (243) (166) (297)
Finance income - - (13)
(Loss) on equity swap settlements - - -
Investment in subsidiary written-off - - -
(Loss) before income tax (243) (166) (310)
Income tax expense - - -
(Loss) attributable to the owners of the parent and total comprehensive income for the period (243) (166) (310)
Other comprehensive income
Fair value adjustment of equity swap (46) (24) (34)
Other comprehensive income for the period net of taxation (46) (24) (34)
Total comprehensive income for the period attributable to equity holders of the parent (289) (190) (344)
(Loss) per share (Note 3)
Basic (loss) per share (0.003)p (0.002)p (0.004)p
Diluted (loss) per share (0.003)p (0.002)p (0.004)p

Company Statement of Changes in Equity
Unaudited for the six months ended 30 June 2016

Share capital

Share premium
Share based payment reserve
Hedging reserve
Retained earnings / Accumulated losses
£’000 £’000 £’000 £’000 £’000 £’000
At 31 December 2014 57 2,940 236 (280) (1,032) 1,921
Issue of Share capital 20 1,180 - - - 1,200
Share issue costs - (82) - - - (82)
Transactions with owners 20 1,098 - - - 1,118
(Loss) for the year - - - - (310) (310)
Unrealised (loss) on equity swap - - - (34) - (34)
Total comprehensive loss for the year - - - (34) (310) (344)
At 31 December 2015 77 4,038 236 (314) (1,342) 2,695
(Loss) for the period - - - - (243) (243)
Unrealised (loss) on equity swap - - - (46) - (46)
Total comprehensive loss for the period - - - (46) (243) (289)
At 30 June 2016 77 4,038 236 (360) (1,585) 2,406

Company Statement of Financial Position
Unaudited as at 30 June 2016

As at
30 June
As at
30 June
As at
31 December
Non-current assets
Intangible assets 1,072 1,051 1,047
Available for Sale Investment 900 600 850
Total non-current assets 1,972 1,651 1,897
Current assets
Trade and other receivables 667 423 437
Cash and cash equivalents 233 1,257 719
Total current assets 900 1,680 1,156
TOTAL ASSETS 2,872 3,331 3,053
Current liabilities
Trade and other payables (306) (378) (244)
Derivative financial instruments (160) (104) (114)
Total current liabilities (466) (482) (358)
TOTAL LIABILITIES (466) (482) (358)
NET ASSETS 2,406 2,849 2,695
Equity attributable to equity holders of the parent
Share capital 77 77 77
Share premium reserve 4,038 4,038 4,038
Share based payment reserve 236 236 236
Hedging reserve (360) (304) (314)
Retained earnings (1,585) (1,198) (1,342)
TOTAL EQUITY 2,406 2,849 2,695

Company Statement of Cash Flows
Unaudited for the six months ended 30 June 2016

Six months
30 June
Six months
30 June
31 December
Cash flows from operating activities
Operating (loss) (243) (166) (297)
Adjustments for:
Depletion & impairment charge 2 - 4
(Increase) / decrease in trade and other receivables (230) (15) 150
Increase / (decrease) in trade and other payable 62 122 (12)
Net cash generated from operating activities (409) (59) (155)
Cash flows from investing activities
Payments for intangible assets (27) - -
Loans (granted) to related parties (50) - (179)
Payment for AFS Investment - - (250)
Net cash used in investing activities (77) - (429)
Cash flows from financing activities
Proceeds from issuance of ordinary shares - 1,200 1,200
Share issue costs - (82) (82)
Finance expense paid - - (13)
Equity swap settlements receipts - - -
Net cash used in financing activities - 1,118 1,105
Net increase/(decrease) in cash and cash equivalents (486) 1,059 521
Cash and cash equivalents at beginning of period 719 198 198
Cash and cash equivalents at end of period 233 1,257 719
Cash and cash equivalents comprise:
Cash available on demand 233 1,257 719

Notes to the unaudited financial statements for the 6 months to 30 June 2016

1.            Basis of preparation

As permitted IAS 34, ‘Interim Financial Reporting’ has not been applied to these half-yearly results. The financial information of the Company for the six months ended 30 June 2016 have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively “IFRS”) issued by the International Accounting Standards Board (“IASB”) as adopted by the European Union (“adopted IFRS”) and are in accordance with IFRS as issued by the IASB. The condensed interim financial information has been prepared using the accounting policies which will be applied in the Company’s statutory financial statements for the year ending 31 December 2015. 

The financial information shown in this publication is unaudited and does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The comparative figures for the financial year ended 31 December 2015 have been derived from the statutory accounts for the year ended 31 December 2015.  The statutory accounts have been delivered to the Registrar of Companies.  The auditors have reported on those accounts and their report was unqualified and did not contain statements under the section 498(2) or 498(3) of the Companies Act 2006.

The Condensed Consolidated Interim Financial Information was approved by the Board of Directors on 28 September 2016.

2.            (Loss) / earnings per share

The calculation of the basic and diluted (loss) / earnings per share is based upon

30 June
30 June
31 December
Basic (loss) / earnings per share (pence) (0.003)p (0.002)p (0.004)p
Diluted (loss) / earnings per share (pence) (0.003)p (0.002)p (0.004)p
(Loss) / profit attributable to equity shareholders (£243,000) (£166,000) (£310,000)
Weighted average number of shares basic 7,739,999,998 6,889,171,269 7,350,988,902
Weighted average number of shares diluted 8,129,999,998 7,279,171,269 7,490,958,902

3.            Events after the end of the reporting period

On 10th August 2016 the Company announced it had acquired all of the rights Angus Energy Holdings UK Limited ("Angus") has in respect of its 5% legal and beneficial interest in the 200 km2 onshore Isle of Wight oil and gas licence (PEDL 331)

On 6th September 2016 the Company announced an Open Offer to raise up to £865,200 (before expenses), Qualifying Shareholders are being offered the opportunity to subscribe for up to 2,471,999,999 Open Offer Shares at a price of £0.00035 per Open Offer Share.

4.            Availability of the Interim Report

Copies of the report will be available from the Company’s registered office and also from the Company’s website www.doriemus.co.uk.

Quick facts: DORIEMUS

Price: 0.05

Market: ASX
Market Cap: $2.9 m

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