Leaf Through BPH Energy’s Key Investee, Advent’s Performance in 2019

Diversified Australian entity, BPH Energy Limited (ASX:BPH) has been expanding its presence in the resources sector via its major investee, Advent Energy Limited - an oil and gas exploration and development company which possesses offshore and onshore exploration and near-term development assets throughout Australia.

Recently, BPH Energy’s direct shareholding in Advent rose from the earlier 22.6 per cent to 22.7 per cent as a result of debt conversion that occurred on 11^th February 2020. The Company reached into a settlement with MEC Resources Limited (ASX:MMR) to raise shareholding in Advent.

The investment in Advent has provided the Company with an exposure to the high-profile assets, including:

• PEP 11 (85 per cent stake) in the offshore Sydney Basin via wholly owned subsidiary Asset Energy Pty Ltd, and
• EP386 and RL1 (100 per cent stake) in the onshore Bonapatre Basin via wholly owned subsidiary Onshore Energy Pty Ltd.

BPH Energy has recently released Advent’s Annual Financial Report to 31^st December 2019 on the ASX, highlighting key developments observed during the period, as discussed below:

Onshore Energy’s Application to WA DMIRS Successful

Advent’s wholly owned subsidiary, Onshore Energy turned out to be successful in its application to Western Australia’s Department of Mines, Industry Regulation and Safety (WA DMIRS) in May 2019 for funding from their Exploration Incentive Scheme (EIS). The application described a new well targeting an as-yet untested formation exhibiting live oil shows in the Waggon Creek area, within EP386.

The government co-funded $200,000 worth of exploration drilling grant to Onshore Energy based on 1:1 co-funding of drilling expenditure.

To ensure the EIS funding, the co-funded drilling project has to be finalised prior to 30^th June 2020. Onshore Energy is planning to make an application to extend the date of completing the project.

RL Energy JV Agreement for PEP 11 Permit Terminated by Mutual Consent

Advent terminated the RL Energy JV agreement for PEP 11 permit by mutual consent in September 2019, as a result of which Asset Energy Pty Ltd holds 85 per cent stake in the permit. After reviewing the work program, the PEP 11 JV now intends to proceed with drilling a well at Baleen target after obtaining approvals from National Offshore Petroleum Titles Administrator (NOPTA) and other regulatory authorities, and financing.

Advent has recently submitted an application to NOPTA seeking approval to conduct drilling at Baleen target in PEP 11 permit offshore New South Wales.

The application to NOPTA includes:

• extending the permit title for up to two years to pave way for the drilling, and
• eliminating the need for a 3D seismic program (500 sq. km).

Retention Licence 1 Renewed in Northern Territory

Advent was granted a renewal of RL1 in the Northern Territory in September 2019 by the NT Department of Primary Industry and Resources for a period of five years ending in July 2023. Besides RL1, Advent holds 100 per cent stake in EP 386 via Onshore Energy.

During the period, an application was made to DMIRS for a two-year suspension and extension of the permit commitment terms in EP386 in the onshore Bonaparte Basin in WA.

In addition to these developments, Advent entered into a Deed of Settlement and Release with MEC, Trandcorp Pty Ltd, BPH Energy and GBA during the period.

Review of Financial Performance

Advent’s net assets rose by $7.05 million to $11.6 million over the year to 31 December 2019, mainly due to the reversal of a $6.9 million writedown booked on the PEP 11 permit in the previous period. Its assets include R&D incentive received by MEC after recent seismic activities within PEP 11, the majority of which costs had been borne by Advent.

Moreover, Advent reported an operating profit for the group after tax of $6.5 million for the year, which marks a considerable improvement from the loss of $19 million observed in FY18.

Going forth, BPH Energy’s key investee, Advent aims to continue to advance its investee portfolio projects including PEP 11, EP386 and RL1 and may assess and invest in numerous resource projects.

Also Read Glance at BPH Energy’s Operational Performance in 1H FY20

BPH last traded on 26^th February 2020 at $0.001.

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