Investor Presentaiton
Armour Energy and controlled entities
armourenergy.com.au
Review of operations and activities continued
for the year ended 30 June 2020
OPERATIONS REVIEW CONTINUED
CORPORATE ACTIVITIES CONTINUED
Corporate Bond Finance Facility continued
As a result of the asset transactions with APLNG and Santos, which generated $10 million in working capital, Armour made a $5.3
million early principal amortisation payment on the Secured Amortising Notes during August 2020.
FINANCIAL REVIEW
FINANCIAL PERFORMANCE
Revenue
Revenue
S$2
$21.1 million
2019: $27.8 million
Sales ($ millions)
19.81
Underlying EBITDA
(Non-IFRS measure)
$7.3 million
Financing costs of $7.2 million (2019: $13.6 million) mainly representing interest expense and amortisation expenses relating the
loan facilities taken out in the previous year.
Armour has taken steps to reduce corporate costs as previously announced by a minimum of 35%. This included head office
staff reducing remuneration by 20% and planned redundancies. The Executive Chairman and Non-Executive Directors have
also reduced their fees by 20%. In addition, Armour is seeking to reduce to the full extent possible all other overheads including
contractor hours and rates and administration costs.
Operating Loss
$9.6 million
2019: $11.6 million
Armour is also aiming to reduce operating expenditure at its Kincora Gas Project by approximately 20%, while maintaining its
ability to reliably maintain production in a safe and environmentally compliant manner. This will include revised staff rostering and
schedules but will unfortunately also include some redundancies.
Assets
Cash
$3.2 million
Oil and Gas Assets
$58.3 million
2019: $42.3 million
Sales (TJs)
3,266.9
20.0
18.0
15.39
16.0
14.0
12.0
10.0
8.0
6.0
4.06
4.0
2.73
2.07
2.0
0.92
3,500
3,000
2,601.8
2,500
2,000
1,500
1,000
500
208.1
LLLL
FY2020
Gas Sales
Condensate Sales Oil Sales
1.31
FY2019
LPG Sales
2.64
92.3
2020
192.8
229.4
79.9
2019
■Sales Gas Condensate Oil LPG
218.4
2019: $9.2 million
Exploration Assets
$35.2 million
2019: $49.3 million
Total assets reduced by $4.9 million from $116.9 million to $112.0 million, and includes:
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Cash and Cash Equivalents of $3.2 million.
Other Current Assets, including Receivables, Inventory and Assets Held for Sale of $5.6 million.
Financial assets comprising cash-backed security deposits and bank guarantees of $9.2 million.
Exploration assets of $35.2 million, which primarily consists of Armour's Northern Territory and North Queensland assets and
offset with the $15 million received from Santos for the 70% interest and operatorship of ATP1087.
Oil and Gas assets of $58.3 million which comprise all the land, licences, and physical assets within the Kincora Project.
Intangibles of $0.2m related to the capitalisation of the development of software.
Sales Revenue ($ millions)
Gas Sales
Condensate Sales
Oil Sales
LPG Sales
Total Sales
FY2020
FY2019
Change
Realised $/unit
FY2020
FY2019
Change
15.4
19.8
(22.3%)
Gas Price (GJ)
6.10
6.06
0.7%
Liabilities
2.7
4.1
(32.7%)
Condensate Price (BBL).
0.46
0.9
1.3
(29.9%)
Oil Price (BBL)
0.50
0.61
0.61
(24.8%)
Corporate Bond and Loan Facility
Provisions
(18.0%)
$54.8 million
$7.7 million
2.1
2.6
(21.8%)
LPG Price (T)
526.94
601.34
(12.4%)
2019: $57.4 million
2019: $8.6 million
21.1
27.8
(24.1%)
பட
Figure 9 Sales revenue and average realised prices per unit per revenue stream
The second full year of operations at the Kincora Plant saw an overall 24.1% reduction (2019: increase of 88%) in revenues from
the sales of Gas, LPG, and condensate. This was a result of several factors including reduced average realised pricing across
most products, attributable to the COVID-19 Pandemic, except for gas prices which had a slight increase. Unfortunately, the slight
increase in the average gas price did not fully offset the reduced volumes of sales.
Armour generated sales of $21.1 million during the year ended 30 June 2020, which represents a decrease of $6.7 million from
the prior year (see Figure 9). Having reduced sales and a full years cost of running the operation, Armour realised a gross profit
from operations of $1.6 million (2019: $8.8 million). This was largely offset by the financing costs and general and administrative
expenses. As the current year's finance cost was significantly less than the 2019 financial year, the total loss after income tax for
Armour was lower than the previous year at $9.6 million (2019: $11.6 million loss).
Total liabilities decreased by $2.2 million from $72.1 million to $69.9 million, and includes:
Trade payables and other miscellaneous of $7.3 million.
"
Corporate Bond facility, Tribeca Loan facility and lease liabilities of $55.1 million.
Rehabilitation provision of $6.7 million and the present value of the deferred consideration payable to Origin Energy of $1.0
million.
All covenants in place for the Corporate Bond and Tribeca Loan Facilities were passed during the year ended 30 June 2020.The
final amount of $1.0 million payable to Origin energy is in relation to the purchase of the Kincora Project. Unscheduled amortisation
payments of $5.3 million was made to FIIG in August 2020, reducing the Corporate Bond Facility ahead of planned. This was a
result of the amendment to the Santos farmin agreement and the sale of Armour's 10% interest in Murrungama.
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