interim report 1 january – 30 june, 2017 · interim report 1 january – 30 june, 2017 first...

Interimreport 1January–30June,2017FIRSTHALF-YEAR

Revenuefromoil&gasproductionincl.realizedderivativesof$3,721’(1,087’). Effectfromunrealizedderivatives$18’(0). Grossresultfromproductionincl.realizedhedges$1,241’(-349’)withamarginof33%(-32%). EBITDA$1,434’(-2,184’). EBITDAforUSoperationsadjustedforunrealizedderivativesamountedto$2,397’(-792). Netresultof-$3,744’(-6,340’). Earningspershare-$0.03(-0.18).

SIGNIFICANTEVENTSDURINGTHEHALF-YEAR Extraordinary shareholders meeting was held on January 18, 2017 and it was decided to issue54,890,695sharesbyset-off,toadoptnewarticlesofassociationwithahighernumberofsharesandtoissuearightsissueof104,174,746shares.

AprospectusforcapitalacquisitionwaspublishedonFebruary14,2017. Restartedseveralshutwellstoregainproduction. ResumingofdrillingprograminOrangefield,Texaswithasuccessfulresult. TheRightsIssuesdescribedabovewerefullysubscribedandincludingtheset-offissuetheCompanygotanadditionof$14,747’inequitypriortoissuancecostduringthespringof2017.

ThesubsidiaryDomeABInc.signedanagreementinearlyJunetoacquirenineproducingoilwellswithdevelopmentacreage.Thepurchasepriceof$2,000’plusafurther$2,000’indevelopmentcapitalhavebeenfundedthroughbridgeloans.TheCompanyintendstoaddthisdebttotheexistingbankfacilitylaterthisyear.

OrdinaryShareholdersmeetingwasheldonJune20,2017andMatsGabrielssonwaselectednewboardmember.

Dome Energy has signed a contract to acquire 100% of the shares in the US company Ginger OilCompany.Thenegotiationsarestillongoingandtheacquisitionisnotclosedonthedayofthisreport.

SUBSEQUENTEVENTSAFTERCLOSINGOFTHEPERIOD Announcementofthecommencementofafourwelldrillingprogram.

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DOMEENERGYINTERIMREPORT1STHALF-YEAR2017

FINANCIALKEYRATIOSUSDThousand 1sthalf 1sthalf FY 2017 2016 2016Revenuesfromoilandgassalesincl.realizedderivatives 3721 1087 3578

Valuechangeinunrealizedderivatives 18 - -Grossprofitfromoil&gasoperationsincl.realizedderivatives 1241 -349 549Grossmargin,% 33% -32% 15%EBITDA 1434 -2184 -3740

EBITDAfortheUSoiloperation(adjustedforunrealizedderivatives) 2397 -792 -2237EBIT -2595 -5012 -8169

EBT -3744 -6360 7397

Netresult -3744 -6340 7402EPS(inUS$) -0.03 -0.18 0.22Production(boepd) 919 600 560

LettertoShareholders Dearshareholders,Thefirsthalfof2017hasbeenanextraordinaryeventfulperiod.Wemanagedtorestructureourdebtsituation,resultinginsomedebtforgivenessfromoursuppliers,andanequityissuetowardsexistingshareholders.Thesemeasureshaveallowedustorestartalotofshutinproduction,whichisshowninoursalesandEBITDAforthesefirstsixmonths.Ourbalancesheethasimprovedalot,butwehopetoseecontinuousimprovementwiththeadditionofreservesandproduction.Earlierthisyearweacquiredseveralleasesandproducingwellsinthewell-known“IllinoisOilBasin”.Theseassetsmarkachangeinourhistoryofonlydrillinganddevelopingconventionaloilassets.Thesewellsareconsideredtobeconventionalintermsthattheyareverticallydrilled,butweapplyfracturingfluidsatsubstantialpressure,aknownmethodcalled“fracking”.The leasesweholdallowsustodrillandfrackwellsata20-acrespacing,whichcouldallowustodrillalargeamountofwells.Thefirstprogramiscurrentlybeinglaunchedwithfourwellsdrilled and stimulatedwithin thenext coupleofmonths.Wehope thesewells prove the continuationof orleasehold,whichwouldallowmoreprovenreservesandmorewellstobedrilled.Ourportfolioofwellsandassetshasattractedalotofinterestfromotherparties.Wehavesoldsmallinterestinnon-coreassets,whichwillnotaffectourreservevaluation.Thisismostlyduetosomeofourwellsholdingalotofunexploredleases.WellsandleasesinOklahomaandTexasareespeciallyoninteresttopotentialbuyers.Thesecondhalfof2017willbecontinuingwhatwehavestartedinthebeginningofthisyear.Wehaverepaidalmost$1,000’ofdebtsofarthisyear,andwehopetoaddtothatnumber.Productionhasincreased,andwithdrillinganddevelopmentprograms,weshouldbeabletoincreaseproductionfurther.WehavereachedastabilepositiveEBITDAinourUSoperations,andthiswillincreasethroughouttheyear.Wewillofcourseneedcurrentproductpricestobeabletoachievethis,andwehavealsosecuredsalesofaportionofourproductionthrough2018.Yourssincerely,PålMørchPresident&ChiefExecutiveOfficerHouston,USA,August31,2017

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OperationalandFinancialReview

RevenueDuringthefirsthalfyeartheCompanyproduced166,271barrelsofoilequivalent(110,250)representing919barrelsofoilequivalentperday(boepd)(600).Theproductionhasincreasedfromlastyear,asseveralwellshavebeenreopened.Grossproductionisbasedonworkinginterest,whichistheCompany’sshareofproductionbeforedeductionofroyaltiesandothertaxes.Someoftheproducedgasisusedtofuelproductionequipmenthencenotreportedasproduction.Insomewellsthismaybeahighpercentageofthetotalproduced.Netrevenueafterroyaltiesfromoilandgassalesamountedto$3,716’(1,835’)forthefirsthalfyear.Realizedvaluefromhedgesamountedto$5’(-748’).Unrealizedvaluefromthehedgeportfolioamountedto$18’(0)andisanon-cashitem.

EBITDAGrossresult,representingnetrevenuefromoilandgassalesincludingrealizedhedgesafterproductioncosts,amountedto$1,241’(-349’)withamarginof33%(-32%)forthefirsthalfyear.EBITDAamountedto$1,434’(-2,184) for the first half year. EBITDA for our US operations excluding changes in value of the unrealizedderivativesamountedto$2,397’(-792).

NetresultDepreciation,depletionandreversedwrite-downsforthefirsthalfyearamountedto-$4,029’(-2,828‘).Thenetfinancialitemsamountedto-$1,149(-1,348’)forthefirsthalfyear.Nocorporatetaxhasbeenpaidduringthefirsthalfyear(0).Thenetresultforthefirsthalfyearamountedto-$3,744’(-6,340’).

FinancialpositionandcashflowAs per June 30, 2017 cash and cash equivalents amounted to $3,346’. Outstanding interest bearing debtamountedto$35,107’afterrepaymentoftheoldbridgeloanfromMiddelborgInvestASandtakingupnewshortbridgeloansfortheacquisitionsofnineproducingoilwellsandtodevelopadditionalacreage.Thenewbridgeloansamountsto$4,723’andtheintentionistoaddamajorityofthisdebttotheexistingbankfacilitylaterthisyear.

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DOME ENERGY INTERIM REPORT 1ST HALF-YEAR 2017

FinancialStatements

ConsolidatedIncomeStatementinSummary

1sthalf 1sthalf FY 1sthalf 1sthalf FYNote 2017 2016 2016 2017 2016 2016

Revenuefromoperations 3 32938 15291 36865 3716 1835 4306Otherincome 3 18847 533 5933 2126 64 693Incomefromderivatives 3 204 -6233 -6233 23 -748 -728Totalrevenues 51989 9591 36565 5865 1151 4271

Operationalcosts -21982 -11967 -25933 -2480 -1436 -3029Otherexternalcosts -17297 -15824 -42648 -1951 -1899 -4982EBITDA 12710 -18200 -32016 1434 -2184 -3740

Depreciation,depletionandwrite-down 4 -35713 -23566 -37925 -4029 -2828 -4430

EBIT -23002 -41766 -69941 -2595 -5012 -8169

Financialincome 3675 4542 163682 415 545 19119Financialexpenses -13855 -15778 -30417 -1563 -1893 -3553Totalfinancialitems -10180 -11236 133265 -1149 -1348 15566

EBT -33183 -53003 63324 -3744 -6360 7397

Tax -2 167 45 0 20 5Resultfortheperiod -33185 -52835 63369 -3744 -6340 7402

Resultattributableto:OwnersoftheParentCompany -33185 -52835 63369 -3744 -6340 7402

Totalresultfortheperiod -33185 -52835 63369 -3744 -6340 7402

ResultpershareEarningspershare,USD/SEK -0,25 -1,54 1,84 -0,03 -0,18 0,22Earningspershare(afterdilution),USD/SEK*

-0,25 -1,54 1,84 -0,03 -0,18 0,22

Numbersofshares

Numberofsharesoutstanding 229292636 34401945 34401945 229292636 34401945 34401945

Numberofsharesoutstanding(afterdilution) 229292636 34401945 34401945 229292636 34401945 34401945

Weightednumberofshares 133424829 34401945 34401945 133424829 34401945 34401945

Weightednumberofshares(afterdilution) 133424829 34401945 34401945 133424829 34401945 34401945

*Dilutionhasnotbeenconsideredifthelosspersharewouldbelower.

SEKThousand USDThousand

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ConsolidatedStatementofComprehensiveIncomeinSummary

1sthalf 1sthalf FY 1sthalf 1sthalf FY2017 2016 2016 2017 2016 2016

Resultfortheperiod -33185 -52835 63369 -3744 -6340 7402

OthercomprehensiveresultCurrencytranslationdifferences -1088 -8375 -22235 -123 -552 -2597

-1088 -8375 -22235 -123 -552 -2597

Totalcomprehensiveincome -34273 -61210 41134 -3867 -6892 4805

Attributableto:OwnersoftheParentCompany -34273 -61210 41134 -3867 -6892 4805

Totalcomprehensiveresultfortheperiod -34273 -61210 41134 -3867 -6892 4805

Othercomprehensiveincome,netoftax


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Note 2017-06-30 2016-06-30 2016-12-31 2017-06-30 2016-06-30 2016-12-31

ASSETS

Non-currentassets

Oilandgasassets 268655 279586 289880 31722 32965 31865Othertangiblefixedassets 4497 13095 5240 531 1544 576Financialassets 5 119 – – 14 – –Othernon-currentassets 6240 5844 6268 737 689 689Totalnon-currentassets 279511 298525 301388 33004 35198 33130

Currentassets

Receivablesandpre-paidexpenses 11373 6921 11899 1343 816 1308Cashandcashequivalents 28338 6194 30242 3346 730 3324Totalcurentassets 39712 13115 42141 4689 1546 4632

TOTALASSETS 319222 311640 343529 37693 36744 37762

EQUITYANDLIABILITIES

Totalequity -55954 -239877 -137531 -6607 -28283 -15118

LIABILITIES

Non-currentliabilities

Non-currentinterestbearingdebt 156422 97743 239552 18470 11525 26333Non-currentnon-interestbearingdebt 15185 – 16311 1793 – 1793Provisions 38542 32661 41510 4551 3851 4563Totalnon-currentliabilities 210150 130404 297373 24814 15375 32689

Currentliabilities

Currentinterestbearingdebt 140901 327259 85211 16637 38586 9367Accountspayableandotherliabilities 24124 93854 98476 2849 11066 10825Totalcurrentliabilities 165026 421113 183687 19486 49652 20192

TOTALEQUITYANDLIABILITIES 319222 311640 343529 37693 36744 37762

ConsolidatedBalanceSheetinSummary

USDThousandSEKThousand

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ConsolidatedStatementofChangesinEquityinSummary

1sthalf 1sthalf FY 1sthalf 1sthalf FY2017 2016 2016 2017 2016 2016

Openingbalance -137531 -178667 -178667 -15118 -21391 -21391

Netresult -33185 -52835 63369 -3744 -6340 7402Othercomprehensiveincome -1088 -8375 -22233 -123 -552 -2597Totalcomprehensiveincome -34273 -61210 41136 -3867 -6892 4805

Issueofnewshares,net 124891 – – 14747 – –Costofnewissues -9041 – – -1068 – –Currencytranslationdifferences – – – -1301 – 1468Closingbalance -55954 -239876 -137531 -6607 -28283 -15118

Attributableto:OwnersoftheParentCompany -55954 -239876 -137531 -6607 -28283 -15118

Totalequity -55954 -239876 -137531 -6607 -28283 -15118

USDThousandSEKThousand

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1sthalf 1sthalf FY 1sthalf 1sthalf FY

2017 2016 2016 2017 2016 2016

Cashflowfromoperatingactivitiesbeforechangesinworkingcapital -5718 -27468 13247 -645 -3296 1547Changesinworkingcapital -70122 13167 -9215 -7911 1580 -1076

Cashflowfromoperatingactivities -75841 -14301 4032 -8556 -1716 471

Cashflowfrominvestingactivities -30385 48951 -2843 -3428 5874 -332Cashflowfromfinancingactivities 105304 -33277 23926 11880 -3993 2795

Cashflowfortheperiod -922 1373 25115 -104 165 2934

Cashandcashequivalentsatthebeginningofperiod 30242 4724 4724 3324 566 566

Exchangeratedifferencesincashandcashequivalents -982 97 403 126 -1 -175

Cashandcashequivalentsattheendofperiod 28338 6194 30242 3346 730 3324

ConsolidatedStatementofCashFlowinSummary


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ParentCompanyIncomeStatementinSummary


2017 2016 2016 2017 2016 2016

Revenuefromoperations 598 – 669 67 – 78Otherincome 171 – 47 19 – 5Totalrevenues 769 – 716 87 – 84

Otherexternalcosts -9465 -11603 -13579 -1068 -1392 -1586EBITDA -8696 -11603 -12863 -981 -1392 -1502

EBIT -8696 -11603 -12863 -981 -1392 -1502

Resultfrominvestments – – -84344 – – -9852Financialincome 4455 – 11829 503 – 1382Financialincomefromassociates 540 3306 10027 61 397 1171Financialexpenses -7118 -7044 -8483 -803 -845 -991Totalfinancialitems -2123 -3738 -70971 -240 -449 -8290

EBT -10819 -15341 -83834 -1221 -1841 -9792

Tax -2 – -110 0 – -13Resultfortheperiod -10821 -15341 -83944 -1221 -1841 -9805

ParentCompanyStatementofComprehensiveIncomeinSummary


2017 2016 2016 2017 2016 2016

Resultfortheperiod -10821 -15341 -83944 -1221 -1841 -9805

Othercomprehensiveincome,netoftax – – – – – –Totalcomprehensiveincome -10821 -15341 -83944 -1221 -1841 -9805

Attributableto:

OwnersoftheParentCompany -10821 -15341 -83944 -1221 -1841 -9805

Totalcomprehensiveresultfortheperiod -10821 -15341 -83944 -1221 -1841 -9805



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ParentCompanyBalanceSheetinSummary

2017-06-30 2016-06-30 2016-12-31 2017-06-30 2016-06-30 2016-12-31Note

ASSETS

Non-currentassets

Sharesinsubsidiaries 222945 – 222945 26325 – 24507Financialnon-currentassets 41 247076 5216 5 29132 573Totalnon-currentassets 222986 247076 228161 26330 29132 25081

Currentassets

Receivablesandprepaidexpenses 21472 840 673 2535 99 74Cashandcashequivalents 23511 45 686 2776 5 75Totalcurrentassets 44983 885 1359 5311 104 149

TOTALASSETS 267969 247961 229520 31641 29236 25230

EQUITYANDLIABILITIES

Totalequity 160251 123825 55222 18922 14600 6070

Liabilities

Longtermdebt – 97743 53334 – 11525 5863Shorttermdebt 107718 26393 120964 12719 3112 13297Totalliabilities 107718 124136 174298 12719 14636 19160

TOTALEQUITYANDLIABILITIES 267969 247961 229520 31641 29236 25230

ParentCompanyStatementofChangesinEquityinSummary

2017-06-30 2016-06-30 2016-12-31 2017-06-30 2016-06-30 2016-12-31

Openingbalance 55222 139166 139166 6070 16662 16662Netresult -10821 -15341 -83944 -1221 -1841 -9805Othercomprehensiveincome – – – 394 -221 -787Totalcomprehensiveincome -10821 -15341 -83944 -827 -2062 -10592

Issueofnewshares 124891 – – 14747 – –Costofnewissues -9041 – – -1068 – –Closingbalance 160251 123825 55222 18922 14600 6070



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KeyratiosfortheGroup

1sthalf 1sthalf FY

2017 2016 2016

Result

Revenuesfromoperations 3716 1835 4306Otherincome 2126 64 693Increaseinrevenuesfromoperations,% 115% -61% -42%EBITDA 1434 -2184 -3740Netresult -3744 -6340 7402

Returnratios

Returnonequity,% nmf. nmf. nmf.Returnoncapital,% neg. neg. neg.

Financialposition

Equity,% neg. neg. neg.Totalassets 37693 36744 37762Equity -6607 -28283 -15118

Pershare

Numberofsharesoutstanding 229292636 34401945 34401945Numberofsharesoutstanding(afterdilution) 229292636 34401945 34401945Weightednumberofshares 133424829 34401945 34401945Weightednumberofshares(afterdilution) 133424829 34401945 34401945Earningspershare,USD -0,03 -0,18 0,22Earningspershareafterdilution,USD* -0,03 -0,18 0,22Equitypershare,USD -0,03 -0,82 -0,44Equitypershareafterdilution,USD -0,03 -0,82 -0,44

Employees

Averagenumberofemployees 15 16 16

*Dilutionhasnotbeenconsideredifthelosspersharewillbelower.

AmountsinTUSDunlessotherwisestated

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Notes

AccountingprinciplesTheinterimreportofDomeEnergyGroup(DomeEnergyAB,DomeEnergyInc,DomeABInc)hasbeenpreparedinaccordancewiththeAnnualAccountsActand IAS34.The interimreportoftheParentcompanyhasbeenprepared in accordance with the Annual Accounts Act, Chapter 9 - Interim reports. The same accountingprincipleswereusedasdescribedintheAnnualreport2016.

Note1 RisksanduncertaintiesTheGroup’sexposuretorisksisdescribedintheAnnualReport2016,Note3.TheGroup’sactivitiesareexposedto different financial risks. The financial risks that themanagement observes are: 1)Market risk (includingcurrency risk,price riskandcash flowand fairvalue risk in interest rates),2)Credit riskand3)Liquidityandfinancialrisk.TheGroupsoverallriskmanagementpolicyfocusontheunpredictabilityonthefinancialmarketsandstrivetominimizethepotentialnegativeeffectsonresultandliquidityasaresultoffinancialrisks.ThemainfinancialrisksthathavebeenidentifiedwithintheGroupiscurrencyrisk,priceriskandliquidityrisk.Thefinancialinvestmentsareexposedtopriceriskandliquidityriskinthecaseadditionalinvestmentsareneededthatcannotbefinanced.

Note2 ExchangeratesForthepreparationofthefinancialstatements,thefollowingexchangerateshavebeenused.

1sthalf 1sthalf FY

2017 2016 2016

Average Periodend Average Periodend Average Periodend

SEK/USD 8.8639 8.4690 8.3331 8.4813 8.5613 9.0971

Note3 Revenuefromoperations,otherincomeandderivatives 1sthalf 1sthalf FY 1sthalff 1sthalf FY 2017 2016 2016 2017 2016 2016


Oil 16735 8424 22242 1888 1011 2598

Gas 13828 6075 13373 1560 729 1562

NGL 2376 792 1250 268 95 146

Totalrevenuefromoperations 32938 15291 36865 3716 1835 4306

Gainonsalesofassets 3980 533 933 449 64 109

Otherincome 14867 - 5000 1677 - 584

Totalotherincome 18847 533 5933 2126 64 693

Incomefromderivatives

Realized

WTI - 1491 1491 - 179 174

Brent - -11174 -11174 - -1341 -1305

Gas 44 3450 3450 5 414 403Totalrealizedincomefromderivatives 44 -6233 -6233 5 -748 -728

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Cont.Note3 Revenuefromoperations,otherincomeandderivatives


2017 2016 2016 2017 2016 2016


Unrealized

WTI 2 - - 0 - -

Brent - - - - - -

Gas 159 - - 18 - -Totalunrealizedincomefromderivatives 160 0 0 18 0 0

Totalincomefromderivatives 204 -6233 -6233 23 -748 -728Inotherincomeforthefirsthalfof2017isaninsurancesettlementof$624’anddebtforgivenessfromsuppliersamountingto$1,012´.

Note4 Depreciation,depletionandwritedown

1sthalf 1sthalf FY 1sthalf 1sthalf FY 2017 2016 2016 2017 2016 2016


Depreciation -505 -15123 -329 -57 -1815 -38

Depletion -33452 -7534 -53170 -3774 -904 -6211

AccretionexpenseduetoARO -1755 -908 2466 -198 -109 -288Write-downduetoimpairment - - -3954 - - -462

Reversalofwrite-down - - 21994 - - 2569Totaldepreciationanddepletion -35713 -23566 -37925 -4029 -2828 -4430

Note5 DerivativeinstrumentsDerivativesareinitiallyrecognizedatfair-valueonthedatederivativecontractisenteredintoandaresubsequentlyre-measuredatthefairvalue.Changesinthefairvalueofthegroupsexistingderivativesaredesignatedasfairvaluehedgesandarerecordedintheincomestatement.

2017 2018OILHEDGES Barrels Price/barrel Barrels Price/barrelCollars

WTI 18000 $40/$54.80 36000 $40/$57

NATURALGASHEDGES

MMBtu Price/MMBtu MMBtu Price/MMBtu

Commoditiesforwards 273000 $3.185 409800 $2.99

Note6 RelatedpartytransactionsDuringthefirsthalfyear,HåkanGustafsson,ChairmanoftheBoard,hasinvoices$35’fordirectors’feeswhereof$20’wasreferringtofeesfor2016.PetterHagland,MemberoftheBoard,hasnotinvoicedDomeEnergyforanyconsultingordirectors’feesbutaprovisionof$11hasbeenmadeforthefirsthalfyear.

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FinancialCalendarDomeEnergyABhasdecidedtochangethereportingschedulesduring2017frompublishingfinancialreportseveryquartertoevery6thmonth.Thereasonbehindthisdecisionistosavecost.InterimReportJul-Dec2017 February28,2018Annualreportfor2017 May31,2018AnnualGeneralMeeting June30,2018Allreportswillbeavailableonthecompanywebsiteorbycontactwiththecompanyoffices.The Board ofDirectors and the CEOhereby certify that the report gives a fair and true presentation of theCompanyandtheGroup’soperation,positionandresultanddescribestheprincipalrisksanduncertaintiesthattheCompanyandthecompaniesintheGroupface.

Stockholm,August31,2017

PålMørch HåkanGustafsson MatsGabrielsson

PetterHagland

CEO&BoardMember ChairmanoftheBoard BoardMember

BoardMemberThe information inthisreport issuchthatDomeEnergyAB is requiredtodisclosepursuanttotheSecuritiesMarketActandFinancialInstrumentTradingAct.SubmittedforpublicationonAugust31,2017.TheinterimreporthasnotbeensubjecttoreviewbytheauditorsoftheCompany.

Forfurtherinformation,pleasecontact:PålMørch,CEOPhone:+17133854104E-mail:[email protected]

Address:DomeEnergyAB(publ)Engelbrektsgatan9-11SE-11432Stockholm,Swedenwww.domeenergy.comThisinformationisthekindofinformationthatDomeEnergyAB(publ) isobligedtopublicizeaccordingtoEUMarketAbuseRegulations(MAR).Theinformationwaspublicized,bytheabovecontactpersonAugust31,2017,08.45CET.

AboutDomeEnergyAB(publ)DomeEnergyAB.isanindependentOil&GasCompanypubliclytradedontheNasdaqFirstNorthexchangeinSweden (Ticker:DOME).Mangold FondkommissionAB,phone: +46850301550, is theCompany’sCertifiedAdviser. Headquartered in Houston, Texas, the Company’s focus is on the development and production ofexistingonshoreoilandgasreservesintheUnitedStates.Formoreinformationvisitwww.domeenergy.com.

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interim report 1 january – 30 june, 2017 · interim report 1 january – 30 june, 2017 first...

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