10th Oct 2022 12:43
(Alliance News) - Advance Energy PLC on Monday continued to tout a potential acquisition, while its annual loss ballooned due to an impairment.
Pretax loss in the financial year that ended April 30 widened to USD27.4 million from USD2.9 million a year prior.
Advance Energy had its initial public offering on the London Stock Exchange's AIM market in April 2021. It is focused on creating a self-funding oil and gas production company that grows through acquisition or by the farm-in to upstream projects.
It doesn't yet generate revenue.
For financial year 2022, Advance Energy took an impairment cost of USD23.9 million on an investment. The impairment relates to an acquisition in April 2021, when Advance bought a 50% stake in Carnarvon Petroleum Timor Unipessoal Lda. Carnarvon was the operator of the Buffalo production sharing contract in Timor-Leste. This past January, a well there was abandoned and the rig demobilised after no oil was discovered.
Advance Energy shares have been suspended since September 9 when the company announced a potential acquisition of a European oil and gas firm, which it didn't name.
Under the agreement, Advance intends to buy the company for a combination of new Advance shares and an earn-out based on oil production. Advance had said it has been actively assessing a number of business development opportunities. The head of terms includes an exclusivity period up to October 29.
The acquisition would be considered a reverse transaction under AIM rules and so Advance Energy shares have been suspended from trading.
"Without doubt, the year under review has been a challenging one for the company, with a disappointing outcome on the Buffalo well announced in January 2022," commented Chair Mark Rollins on Monday. "Since that time, the board has refocused the strategy for the company and substantially reduced its cost base."
Looking ahead, he added: "The board remains confident that its refocused strategy is the right one. Whilst there can be no guarantee any acquisition will be completed, the board's extensive industry relationships and the tenacity of the team provide a strong basis for confidence."
By Tom Budszus; [email protected]
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