Corcel LON:CRCL, the London-based, AIM-listed upstream oil & gas and mining company, published its final results to end-June Monday (16th December).
The company reported a loss for the period of around £3m. This was up 140% from the loss of £1.26m reported for the same period in 2023. Management explained that this was a result of an increase in administrative costs from £1.44m in 2023 to £2.57m, as well as a £220,000 impairment related to Corcel’s Canegrass project in Australia.
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In terms of expenditure, project costs were more or less the same. In 2023 around £110,000, and £140,000 for the reporting period. However, the company did cut its financing costs from £450,000 in 2023 to around £130,000 this year as the company made a strategic decision to prioritise cheaper funding.
This was helped by a series of successful fundraisings over the year. There was a £399,750 equity issuance in May, another half-a-million pounds in June from strategic investors, and in September a £1.22m fundraising.
The funds were deployed on Corcel’s existing projects. These include its Kwanza Basin project in Angola, legacy rare earth battery minerals in Western Australia and the option to acquire a gas production project in Brazil.
Corcel has assets on three continents
Corcel was founded in 2004 and listed on AIM the following year. The company has its main project in African oil-exporter Angola. Here, since 2023 it has owned 90% of Apex, which gives Corcel access to three producing assets. KON-11 and KON-12 are no-operated brownfield sites with development opportunities. KON-16 (which Corcel operates) has exploration potential, with pre-salt wells that have oil shows.
Brazil, meanwhile, has similar geography and geology to Angola. But in terms of oil & gas Brazil has been less-developed than its trans-Atlantic neighbour. However, this is set to change, Corcel believes, especially with Petrobras, Brazil’s state oil company, relinquishing its onshore monopoly. Corcel feels Brazil offers: “[…] significant returns available from simple workovers with short payback periods and low capital development opportunities.” As such, Corcel is busy exploring multiple onshore O&G opportunities there.
Away from oil, Corcel has an 80% stake in the Mount Weald rare earth mineral project in Western Australia. Mount Weald is close to another producing rare earth element mine, Laverton, operated by Lynas Rare Earth [ASX:LYC]. Corcel completed an initial drill programme in 2023 and is awaiting results.
Pivotal year for Corcel
Scott Gilbert, Corcel’s CEO said in a statement: “2024 has been a pivotal year for Corcel. The acquisition of a 90% interest in Apex in June 2023 marked the beginning of a new chapter, enabling the business to pivot our focus toward high-impact, high-potential oil and gas assets in Angola’s Kwanza Basin. In KON-16, our operated block, we made significant progress, including the completion of the Enhanced Full Tensor Gradiometry survey-an instrumental step in refining our exploration plans.”
Gilbert believes 2025 will be another transformational year for Corcel. He said: “Corcel is entering an era of execution. Our focus for the year ahead includes advancing exploration on KON-16, expanding our footprint in Brazil, and maximising the value of KON-11 and KON-12 through close collaboration with Sonangol [Angola’s state oil company]. Simultaneously, we will work to maximise value from our Battery Metals and Rare Earth assets to capture the opportunities, presented by the energy transition.”
Shares opened the week at 0.17p, falling to 0.16p by the close of play, down 63% over one-year. Corcel was quite a volatile stock at the start of the year, ranging from 0.39p to 1.355p in 1Q24. The stock’s lowest point was 0.09p and the company has a market cap of £6.4m.
Corcel is an ambitious company with a diverse portfolio of assets. It faces challenges, including a recent loss. But Corcel’s strategic focus on high-potential oil and gas exploration, coupled with its rare earth mineral assets, positions it for potential growth in the future. Investors should keep an eye on the company’s progress in Angola and Brazil, as well as the results from its rare earth exploration in Western Australia.
