RNS Number:2739I
Plectrum Petroleum PLC
31 August 2006
PLECTRUM PETROLEUM PLC
("PLECTRUM" OR THE "COMPANY")
PRESS RELEASE
31 August 2006
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2006
Plectrum Petroleum PLC, the AIM listed oil & gas exploration company, today
announces its un-audited interim results for the six months ended 30 June 2006.
Plectrum was established to make full use of newly emerging technologies such as
electro-magnetic imaging as an additional screening tool, applying them to a
balanced global portfolio of offshore exploration opportunities in order to
prioritise and take forward only the very best exploration prospects.
Highlights
In the six month period, Plectrum:
*made significant progress in establishing itself within the industry,
including institutional shareholders and host governments:
*agreed a joint venture with Gold Oil Plc in Peru and applied to PeruPetro
for an Exploration and Exploitation Licence in respect of Block Z-34,
offshore Peru:
*signed an agreement for the acquisition of a 50% interest in the Nabeul
Prospect Licence, offshore Tunisia:
*applied for exploration licences offshore Australia (subsequently awarded
9 August 2006) and UK West of Shetlands; and
*raised a further #2,500,000 before expenses from institutional investors.
Commenting on the company's progress over the first half, Mike Whyatt, Executive
Chairman, said:
'Emphasis has been on establishing ourselves in areas which we believe will lend
themselves to the application of modern exploration techniques, particularly
electromagnetic imaging. We are delighted that we have been successful in
completing this process in Australia and Tunisia. We have created sustained
growth in our portfolio in exciting areas with significant potential value. We
expect the momentum to continue over the next few months with the start of
operations in Tunisia and Australia. We are also hopeful that our exploration
contract negotiations in Peru can be brought to a successful conclusion in the
near future. We have achieved significant progress whilst keeping our overhead
at a minimum and I am pleased that our underlying monthly running costs remain
below #50,000 net."
Operational Review
*Acquisition of REAP Tunisia GmbH, including operatorship and 50% working
interest in the 3352 km(2) Nabeul Block located in the Gulf of Hammamet,
offshore Tunisia. The Company has committed to a minimum work programme of
#2.5 million to be completed over the next 17 months. Following approval of
the acquisition by the Tunisian authorities on 22 July, the deal was
completed on 11 August 2006. The Nabeul Block covers 3352 km2 (equivalent to
13 North Sea Blocks) and is in water depths of 250-800m. The initial
Prospection Permit phase runs until 24 January 2008 and three further
exploration periods of up to 5 years each are also available. Several
prospective structures have already been identified in the Birsa sand
fairway play in the Block that are capable of trapping oil volumes in excess
of 100 mmboe.
*On 9 August, the Company was granted exploration permits WA-379-P and
WA-380-P within the Bremer Basin, offshore Western Australia by the
Commonwealth-Western Australia Offshore Petroleum Joint Authority. Plectrum
made the applications in April this year and the awards were made as part of
the Australian government's 2005 competitive bid round. Plectrum has a 100%
working interest and operatorship of this very large area (18,730 km(2)),
and has committed to a guaranteed work programme totalling A$6.7mm over the
two permit areas during the first three years of the six year term. Recent
work on the petroleum prospectivity of the Exploration Permits (Bradshaw
2005*) has demonstrated the potential for discovery of 500 million barrel
oil accumulations.
*The Company has formed a joint venture with Gold Oil Plc in respect of
the 3713 km(2) Block Z-34 offshore Peru. Qualification of Plectrum as an
approved contractor was received from PeruPetro S.A on 7 July 2006. The
joint venture has entered into exclusive negotiations with PeruPetro to
convert the previous Promotional Licence into a full Exploration and
Exploitation Contract. Block Z-34 sits in the prolific Talara Basin which
has produced to date in excess of 1.7 billion barrels of oil and 340 billion
cubic feet of gas. The block, which is equivalent to 14 North Sea Blocks,
sits adjacent to existing producing concessions in water depths of
100-3000m, yet has a sparse existing data set of just 500km 2D seismic. The
initial work programme will be to acquire a conventional modern seismic grid
and enhance these data with marine magnetotelluric (MMT) and
Electro-Magnetic (EM) studies.
*Plectrum applied for a promote licence in the UK 24th Round of Offshore
Licensing on 16 June 2006. Awards are expected to be announced sometime in
September/October 2006.
Results (comparative figures are for the 10 months to 31 December 2005)
The loss for the period of 6 months to 30 June 2006, before and after tax, was
#1,049,781 (#1,256,571), including amortisation of goodwill of #626,338
(#313,169). Expenditure on projects in the period, mainly in Tunisia and Peru,
has increased significantly to #117,908 from #2,208 for the 10 months of last
year. Administrative costs net of interest on bank deposits, were running at
approximately #50,000 per month during the period.
In 2005, the activities of Table Mountain Minerals Plc accounted for expenditure
of #543,415.
On 26 May 2006, we announced the placing with institutions of 17,857,143 new
ordinary shares of 5p at 14p each, raising #2,500,000 before expenses.
Outlook
In the first six months of 2006, the Plectrum team has made good progress
towards building a portfolio of exciting exploration assets in Tunisia, Peru and
Western Australia. The next year will be focused on completing 2D seismic
surveys and EM modeling of the acreage obtained, and in adding further
exploration acreage to the portfolio.
For further information please contact:
Plectrum Petroleum Plc Tel:01330 826710
Mike Evans, Chief Operating Officer
Jim Bain, Finance Director
www.plectrum.co.uk
Aquila Financial Ltd Tel:020 7202 2600
Peter Reilly
Vivienne Macey
www.aquila-financial.com
Corporate Synergy Tel:020 7448 4400
Oliver Cairns
David Seal
*BRADSHAW, B.E. (Compiler) 2005. Geology and Petroleum Potential of the Bremer
Sub-basin, offshore southwestern Australia. Geoscience Australia Record 2005/21.
Plectrum Petroleum Plc
Interim Financial Statements
Profit and Loss Account
Unaudited Audited
6 months 10 months
2006 2005
June December
# #
Turnover - -
Project expenses (117,907) (2,208)
Amortisation of goodwill (626,338) (313,169)
Administrative expenses (426,160) (1,052,792)
---------- ----------
Operating loss (1,170,405) (1,368,169)
Interest receivable 118,770 108,013
---------- ----------
Loss on ordinary activities before taxation (1,051,635) (1,260,156)
Minority interest 1,854 3,585
========== ==========
Retained loss for the period (1,049,781) 1,256,571
---------- ----------
Figures for the 10 months from incorporation to 31 December 2005 have been
provided as comparatives as this period includes the results of the oil and gas
business of Plectrum Group acquired in September 2005 and, therefore, are
considered to be more informative than those for the 4 months ended 30 June
2005.
Balance Sheet
Unaudited Audited
6 months 10 months
30 June 31 December
2006 2005
# #
Notes
Intangible assets
Goodwill 5,323,876 5,950,214
---------- ---------
Fixed Assets
Computer Equipment 4,107 4,006
---------- ---------
Current Assets
Debtors 32,813 84,925
Cash at bank 7,385,672 5,197,494
---------- ---------
7,418,485 5,282,419
---------- ---------
Creditors: falling (253,026) (56,112)
due within one year ---------- ---------
Net current assets 7,165,459 5,226,307
---------- ---------
Net assets 12,493,442 11,180,527
---------- ---------
Minority interest 4,789 2,935
---------- ---------
Shareholders' interest in net assets 12,498,231 11,183,462
---------- ---------
Capital and reserves
Called up share capital 1 8,431,335 7,538,478
Share premium account 2 6,373,248 4,901,555
Profit and loss account 2 (2,306,352) (1,256,571)
---------- ---------
Equity shareholders' funds 12,498,231 11,183,462
---------- ---------
Cash flow statement
Notes
Operating loss (1,170,405) (1,368,169)
Add: Amortisation of Goodwill 626,338 313,169
Depreciation 709 114
---------- ----------
(543,358) (1,054,886)
---------- ----------
Interest received 118,771 108,013
---------- ----------
Decrease/(increase) in debtors 52,112 (32,130)
Increase in creditors 196,914 (98,728)
---------- ----------
249,026 (130,858)
---------- ----------
Net cash outflow from operations (175,561) (1,077,731)
---------- ----------
Purchase fixed assets (810) (4,120)
Acquisition of subsidiary 394,312
Financing
Issue of ordinary shares, less costs 3 2,364,550 5,885,033
---------- ----------
Increase in cash in the period 2,188,178 5,197,494
---------- ----------
ACCOUNTING POLICIES
Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention
and in accordance with applicable United Kingdom accounting standards. The
particular accounting policies adopted are described below.
Basis of consolidation
The financial statements of the Company and its Group undertakings have been
consolidated to 30 June 2006. The results and cash flows relating to
subsidiaries are included in the consolidated profit and loss account and
consolidated cash flow statement from the date of acquisition or up to the date
of disposal.
Acquisitions
On the acquisition of a company or business, fair values are attributed to the
Group's share of net separable assets. Where the cost of acquisition exceeds the
fair values attributable to such net assets, the difference is treated as
purchased goodwill and capitalised in the balance sheet in the year of
acquisition.
Goodwill and intangible fixed assets
Capitalised purchased goodwill in respect of subsidiaries is included within
intangible fixed assets. The goodwill purchased in respect of the acquisition of
the Plectrum group is being amortised over its useful economic life of 5 years.
Tangible fixed assets
Tangible fixed assets are stated at cost less depreciation. Depreciation is
provided at rates calculated to write off the cost of fixed assets, less their
estimated residual value, over their expected useful economic lives on the
following basis.
Computer equipment 33.33% straight line
Oil and gas assets
The Group applies the successful efforts method of accounting for exploration
and evaluation (E&E) costs.
Exploration and evaluation assets
Under the successful efforts method of accounting, all licence acquisition,
exploration and appraisal costs are initially capitalized in well, field or
specific exploration well cost centers as appropriate, pending determination.
Expenditure incurred during the various exploration and appraisal phases is then
written off unless commercial reserves have been established or the
determination process has been completed.
Pre-licence costs: costs incurred prior to having obtained the legal rights to
explore an area are expensed directly to the profit and loss account as they are
incurred.
Exploration and evaluation costs: costs of E&E are initially capitalized as E&E
assets: payments to acquire the legal right to explore, costs of technical
services and studies, seismic acquisition, exploratory drilling and testing are
capitalized as intangible E&E assets.
E&E costs are not amortised prior to the conclusion of appraisal activities.
Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated
into sterling at the rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction. All differences are taken to profit and loss account.
Operating leases
Operating lease rentals are charged to income in equal annual amounts over the
lease term.
Deferred taxation
Deferred taxation is provided in full on timing differences that result in an
obligation at the balance sheet date to pay more tax, or a right to pay less
tax, at a future date, at rates expected to apply when they crystallise based on
current tax rates and law. Timing differences arise from the inclusion of items
of income and expenditure in taxation computations in periods different from
those in which they are included in financial statements. Deferred tax assets
and liabilities are not discounted. Deferred tax assets are recognised to the
extent that it is regarded as more likely than not that they will be recovered.
Investments
Investments held as fixed asset investments are stated at cost less provision
for any impairment.
Pension
A Group company operates a defined contribution pension scheme for its
employees. Contributions payable are charged to the profit and loss account in
the period in which they are payable. The assets of the scheme are held
separately from the Group in independently and professionally administered
funds.
NOTES
1. Share capital
2006
No. #
Authorised
Ordinary shares of 5 pence each 435,300,000 21,765,000
---------- ---------
Issued
Ordinary shares of 5 pence each 179,902,070 8,995,104
---------- ----------
Issued and fully paid
Ordinary shares of 5 pence each 168,626,708 8,431,335
---------- ----------
Issued, not called or paid
Ordinary shares of 5 pence each 11,275,362 563,768
---------- ----------
On 27 April, 1,166,667 shares were issued to an employee under the Company's
share scheme. The Company issued 17,857,143 shares of 5p each on 2 June 2006 at
14p each.
2. Statement of changes in equity
Share Share Retained Total
Capital Premium Earnings
# # # #
At 1 January 2006 7,538,478 4,901,555 (1,256,571) 11,183,462
Share issue 892,857 1,471,693 2,364,550
Loss for the period (1,049,781) (1,049,781)
--------- --------- ---------- ----------
At 30 June 2006 8,431,335 6,373,248 (2,306,352) 12,498,231
--------- --------- ---------- ----------
3. Cash flow from issue of share capital
2006
#
Par value of new shares issued 892,857
Share premium of new shares issued 1,607,143
Costs of issued shares (135,450)
----------
2,364,550
----------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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