28 January 2016
Red Emperor Resources NL (“Red Emperor”)
Quarterly Reports
For The Period Ending 31 December 2015 and Appendix 5B
The Board of Red Emperor Resources NL (“Red Emperor” or the “Company”) provides the following commentary and Appendix 5B for the period ending 31 December 2015.
Philippines (SC 55)
Red Emperor advised during the December quarter that its Joint Venture partner and Operator, Otto Energy Limited (ASX: OEL) requested that a two-year moratorium be granted by the Philippines Department of Energy over SC 55. The JV fulfilled the work obligation under the current exploration Sub-Phase by drilling the Hawkeye-1 exploratory well in August 2015. Although the well did not encounter gas in commercial quantities, it proved the presence of an active petroleum system in the contract area, which hosts the “Cinco Prospect” as well as several other leads.
The consortium intends to undertake further technical studies during the moratorium period, including a Quantitative Interpretation (QI) Study. QI is a relatively recent geophysical technique that is designed to gain a better understanding of existing and potential petroleum reservoirs. The Joint Venture expects a response from the Department of Energy with respect to its moratorium request in Q1 2016.
Subsequent to the end of the quarter, Red Emperor was advised by Otto Energy of its intention to exit the Joint Venture as part of its strategy to focus on its North American assets. As a result, Red Emperor would have the option to either maintain its 15% participating interest in SC 55 or be assigned a percentage of Otto Energy’s interest on a pro-rata basis. In this instance, Red Emperor’s participating interest could be increased by up to 22.5% to 37.5%. Red Emperor is considering its options and will advise the market accordingly.
Georgia
Red Emperor, a 20% shareholder of Strait Oil and Gas Limited (Strait), a Gibraltarian company with a valid Production Sharing Contract (PSC) across Block VIa in the Republic of Georgia, continues to be advised of ongoing negotiations with a potential purchaser of the PSC. Red Emperor understands that delays in reaching agreement with the potential purchaser have been due to volatility in the oil and gas price and political instability in the region. Strait is still hopeful of a conclusion to the negotiations before the end of Q1 2016.
For further information please visit http://www.redemperorresources.com/ or contact:
Red Emperor Resources:
Greg Bandy +61 8 9212 0102
Grant Thornton UK LLP (Nominated Adviser):
Philip Secrett, Jen Clarke, Jamie Barklem 020 7383 5100
Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly
report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10,
17/12/10, 01/05/2013
| Name of entity |
| RED EMPEROR RESOURCES NL |
| ABN |
|
Quarter ended (“current quarter”) |
| 99 124 734 961 |
|
31 December 2015 |
Consolidated statement of cash flows
Cash flows related to operating activities |
Current quarter
$A’000 |
Year to date (6 months)
$A’000 |
| 1.1 |
Receipts from product sales and related debtors |
- |
- |
| 1.2 |
Payments for (a) exploration & evaluation
(b) development
(c) production
(d) administration |
-
-
-
(184) |
(5,100)
-
-
(598) |
| 1.3 |
Dividends received |
- |
- |
| 1.4 |
Interest and other items of a similar nature received |
62 |
126 |
| 1.5 |
Interest and other costs of finance paid |
- |
- |
| 1.6 |
Income taxes paid |
- |
- |
| 1.7 |
Other: Refund of Hawkeye-1 well costs |
398 |
426 |
|
Net Operating Cash Flows |
276 |
(5,146) |
|
Cash flows related to investing activities |
|
|
| 1.8 |
Payment for purchases of: (a) prospects
(b) equity investments
(c) investment in associate |
-
-
- |
-
-
- |
| 1.9 |
Proceeds from sale of: (a) prospects
(b) equity investments
(c) other fixed assets |
-
-
- |
-
-
- |
| 1.10 |
Loans to other entities |
- |
- |
| 1.11 |
Loans repaid by other entities |
- |
- |
| 1.12 |
Other (provide details if material) |
- |
- |
|
Net investing cash flows |
- |
- |
| 1.13 |
Total operating and investing cash flows (carried forward) |
276 |
(5,146) |
| 1.13 |
Total operating and investing cash flows (brought forward) |
276 |
(5,146) |
|
Cash flows related to financing activities |
|
|
| 1.14 |
Proceeds from issues of shares, options, etc. |
- |
5,600 |
| 1.15 |
Proceeds from sale of forfeited shares |
- |
- |
| 1.16 |
Proceeds from borrowings |
- |
- |
| 1.17 |
Repayment of borrowings |
- |
- |
| 1.18 |
Dividends paid |
- |
- |
| 1.19 |
Other – fundraising costs |
- |
(388) |
|
Net financing cash flows |
- |
5,212 |
|
Net increase (decrease) in cash held |
276 |
66 |
| 1.20 |
Cash at beginning of quarter/year to date |
12,118 |
12,494 |
| 1.21 |
Exchange rate adjustments to item 1.20 |
(143) |
(309) |
| 1.22 |
Cash at end of quarter |
12,251 |
12,251 |
Payments to directors of the entity, associates of the directors, related entities of the entity and associates of the related entities
|
Current quarter
$A'000 |
1.23 |
Aggregate amount of payments to the parties included in item 1.2 |
69 |
1.24 |
Aggregate amount of loans to the parties included in item 1.10 |
Nil |
1.25 |
Explanation necessary for an understanding of the transactions |
|
Payment of Directors fees and Remuneration $69k
|
Non-cash financing and investing activities
| 2.1 |
Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows |
|
n/a |
| 2.2 |
Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest |
|
n/a |
Financing facilities available
Add notes as necessary for an understanding of the position.
|
|
Amount available
$A’000 |
Amount used
$A’000 |
| 3.1 |
Loan facilities |
- |
- |
| 3.2 |
Credit standby arrangements |
- |
- |
Estimated cash outflows for next quarter
|
|
$A’000 |
| 4.1 |
Exploration and evaluation |
- |
| 4.2 |
Development |
- |
| 4.3 |
Production |
- |
| 4.4 |
Administration |
200 |
|
Total |
200 |
Reconciliation of cash
| Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. |
Current quarter
$A’000 |
Previous quarter
$A’000 |
| 5.1 |
Cash on hand and at bank |
12,251 |
12,118 |
| 5.2 |
Deposits at call |
- |
- |
| 5.3 |
Bank overdraft |
- |
- |
| 5.4 |
Other (provide details) |
- |
- |
|
Total: cash at end of quarter (item 1.22) |
12,251 |
12,118 |
Changes in interests in mining tenements and petroleum tenements
|
|
Tenement reference |
Nature of interest
(note (2)) |
Interest at beginning of quarter |
Interest at end of quarter |
| 6 |
| Interests in mining tenements held |
|
See Appendix 1 below |
- |
- |
- |
| 6.1 |
Interests in mining tenements tenements relinquished, reduced or lapsed |
- |
- |
- |
- |
| 6.2 |
Interests in mining tenements tenements acquired or increased |
- |
- |
- |
- |
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
|
Total number |
Number quoted |
Issue price per security (see note 3) (cents) |
Amount paid up per security (see note 3) (cents) |
| 7.1 |
Preference +securities (description) |
|
|
|
|
| 7.2 |
Changes during quarter
(a) Increases through issues
(b) Decreases through returns of capital, buy-backs, redemptions |
|
|
|
|
| 7.3 |
+Ordinary securities |
425,292,776 |
425,292,776 |
|
Fully Paid |
| 7.4 |
Changes during quarter
(a) Increases through issues
(b) Decreases through returns of capital, buy-backs |
|
|
|
|
| 7.5 |
+Convertible debt securities (description) |
|
|
|
|
| 7.6 |
Changes during quarter
(a) Increases through issues
(b) Decreases through securities matured, converted |
|
|
|
|
| 7.7 |
Options |
4,500,000
4,320,000 |
- |
Exercise Price
$0.055
$0.08 |
Expiry Date
31 December 2017
2 July 2018 |
| 7.8 |
Issued during quarter |
|
|
|
|
| 7.9 |
Exercised during quarter |
|
|
|
|
| 7.10 |
Expired during quarter |
|
|
|
|
| 7.11 |
Debentures
(totals only) |
|
|
|
|
| 7.12 |
Unsecured notes (totals only) |
|
|
|
|
Appendix 1 – Interests in mining tenements held
| Tenement Reference |
Location |
Working Interest at
Beginning of Quarter |
Acquired/
(Disposed) |
Working Interest at End of Quarter |
| Block Vla |
Republic of Georgia |
20% |
- |
20% |
| Service Contract 55 |
Philippines |
15% |
- |
15% |
Holder: Oil & Gas Beneficial percentage interests held in farm-in or farm- out agreement.
Mining tenements acquired and disposed during the December 2015 quarter: Nil
Beneficial percentage interests in farm-in or farm-out agreements acquired or disposed of during the December 2015 quarter: Nil
