RNS Number:3282T
Fusion Oil & Gas PLC
21 March 2002
Fusion Oil & Gas plc
("Fusion" or "the Company")
Interim Results for the Six Months ended 31 December 2001
Fusion is an international oil and gas exploration company, with extensive
interests in deepwater West Africa, comprising 8 licenses across 6 countries.
During 2002 the Company will be drilling up to three wells on its Mauritanian
acreage where its first well, Chinguetti-1, was a significant oil and gas
discovery.
Highlights
• Material progress has been made across all the exploration licenses held
by the Company.
• Data from the Chinguetti-1 discovery well, offshore Mauritania, suggest
that the pre-drill estimate of reserves of 180 million barrels remains
reasonable, subject to successful appraisal drilling.
• Up to three wells will be drilled in Mauritania during 2002 including at
least one appraisal well on the Chinguetti discovery.
• Drilling in Mauritania is expected to commence in July or August.
• The company has now acquired 2D seismic data on all its exploration
permits and is currently acquiring 3D seismic data in Mauritania and AGC
Cheval Marin.
• Evaluation of 2D seismic data acquired by the company has identified
significant, hitherto unrecognised, exploration potential.
• Following evaluation of these new data the Company has received
expressions of interest from several international oil companies in
participating in its operated deepwater licenses in The Gambia, AGC and
Cameroon.
• Loss after taxation of £327,345 for the period is in line with projections
made at the time of flotation.
21 March 2002
For further details please refer to the company's web page www.fusionoil.com.au
or contact:
Fusion Oil & Gas plc
Alan Stein, Managing Director Tel: +61 89 226 3011
Australia Fax: +61 89 226 3022
e-mail: astein@fusionoil.com.au
Peter Dolan, Chairman Tel: 020 8891 3252
England Fax: 020 8891 1555
e-mail: peter@fusionoil.demon.co.uk
College Hill Associates
Peter Rigby Tel: 020 7457 2020
James Henderson Fax: 020 7248 3295
e-mail: Peter.Rigby@collegehill.com
Chairman's Statement
It gives me great pleasure to report on the progress of your Company for the
half year to 31 December 2001.
Mauritania
Our first drilling campaign offshore Mauritania in mid-2001 resulted in one oil
and gas discovery and one sub-commercial gas discovery. These wells have
provided a wealth of data that has improved both the understanding and
prospectivity of not just the Mauritanian acreage but also the Fusion acreage in
The Gambia, and the Senegal/Guinea Bissau Common Zone ("AGC").
When exploring in remote deepwater environments, the period between exploration
wells can sometimes seem like an eternity. However the results of our 2001
Mauritania exploration drilling programme have now been fully evaluated and have
encouraged the Joint Venture to acquire additional 3D seismic, which is
currently in progress. In July or August this year we will commence drilling
one or possibly two appraisal wells on the Chinguetti oil and gas accumulation
and a contingent exploration well on a nearby prospect.
Data from the Chinguetti-1 discovery well suggest that the pre-drill reserve and
resource estimates remain reasonable. Early stage development studies indicate
that the exploitation costs per barrel will probably be significantly lower than
previously estimated giving the Joint Venture confidence that, subject to
successful appraisal drilling, final reserve volumes are likely to be sufficient
for stand-alone field development. In the event of successful exploration
drilling on prospects in the vicinity of Chinguetti, the economics will probably
be further improved by linking other discoveries to central infrastructure.
Clearly with over 50 additional prospects and leads there is much work to be
done to realise the full potential of this prospective acreage.
It should be recognised that the 2002 drilling campaign will be a milestone in
determining the economic value of just the first possible development on the
Mauritania licenses.
The Gambia and AGC
Further south, in The Gambia and the AGC, interpretation of 2D seismic surveys
acquired during 2001 has been progressing well. In all three of the Fusion
licenses in this area we have acquired data where previously no data were
available.
Additionally, in Cheval Marin, where Agip is the Operator, we have quickly
followed the 2001 2D seismic survey with acquisition of approximately 2,400 sq
km of 3D seismic, which is nearing completion. This fast-track approach to
exploration is testament to the appetite of the joint venture partners to
expedite exploration of this exciting acreage.
Gulf of Guinea - Cameroon and Gabon
In the Gulf of Guinea, the Company is also making progress with exploration in
Cameroon and Gabon. In Cameroon evaluation of the 2D seismic data that were
acquired in the Fusion operated Ntem license during 2001 has revealed a variety
of play types supported by geophysical attributes which are closely analogous to
the recent Okume, Oveng, Ebano and Akom discoveries approximately 100 km to the
south offshore Equatorial Guinea.
In Gabon, acquisition of extensive 2D seismic surveys over the Fusion operated
Iris Marin and Themis Marin licenses has just been completed. This is a
difficult operating environment in which to acquire good quality seismic data.
In the past, poor quality seismic imaging of the primary reservoir has been the
principal reason for exploration failure. The value of using modern seismic
data was demonstrated last year by the Olowi Marin-1 discovery, which is located
between our Iris and Themis licenses. Earlier this month a step out exploration
well to Olowi Marin-1 was drilled only 5 km from the northern border of Themis.
At the time of writing the results had not been released, but once again we hope
that the impact of our modern data added to encouragement from relevant adjacent
discoveries will result in significantly reduced exploration risk and enhanced
value for our licenses.
Outlook
As a consequence of encouraging results from our new 2D seismic surveys and
relevant successful exploration drilling on nearby licenses, I am pleased to
report that we have been approached by several international oil companies who
have expressed interest in contributing to further exploration activities in The
Gambia, Croix du Sud and Ntem licenses.
The time between our exploration wells may indeed seem prolonged, however with a
mass of new well and seismic data to assimilate a cycle time of one year is not
unusual in frontier exploration. The confidence of the Mauritania joint venture
is best expressed by its commitment to additional 3D seismic acquisition plus
the drilling of up to three additional wells during 2002.
Significant progress has been made across all of the licenses in the portfolio
and your management and staff have been working tirelessly to ensure that the
Company is well placed to realise maximum value from its world class acreage
position over the months and years ahead.
Peter Dolan
Chairman
Fusion Oil & Gas plc
21 March 2002
Fusion Oil & Gas plc
Interim Results to December 2001
Consolidated Profit and Loss account
Period Period
6 Months to 12 April 2000 to 12 April 2000
31 December 31 December to 30 June
2001 2000 2001
£ £ £
Operating loss (516,533) (1,219,675) (4,310,399)
Interest receivable and other income 189,188 155,514 478,026
Loss on ordinary activities before taxation (327,345) (1,064,161) (3,832,373)
Tax on loss on ordinary activities 0 0 0
Loss on ordinary activities after taxation (327,345) (1,064,161) (3,832,373)
Loss per ordinary share
- basic 0.35p 2.13p 5.69p
- diluted 0.36p 2.13p 5.70p
Consolidated Balance Sheet
31 December 31 December 30 June
2001 2000 2001
£ £ £
Fixed assets
Intangible exploration and appraisal
Expenditure 4,626,757 1,765,974 2,926,332
Tangible assets 210,072 24,395 47,752
4,836,829 1,790,369 2,974,084
Current assets
Debtors 76,555 73,449 39,165
Investments 6,070,989 9,080,000
Cash at bank 1,009,651 13,540,658 918,947
7,157,195 13,614,107 10,038,112
Creditors (amounts falling within one year)
Creditors 154,164 515,533 850,260
Net current assets 7,003,031 13,098,574 9,187,852
Total Assets less current liabilities 11,839,860 14,888,943 12,161,936
Share capital and reserves
Called up share capital 926,121 912,233 925,380
Share premium account 15,073,457 15,040,871 15,068,929
Profit and loss account (4,159,718) (1,064,161) (3,832,373)
Equity Shareholders' funds 11,839,860 14,888,943 12,161,936
Fusion Oil & Gas plc
Interim Results to December 2001
Consolidated Cash Flow
Period Period
6 Months to 12 April 2000 12 April 2000
31 December to 31 December to 30 June
2001 2000 2001
£ £ £
Net cash (out)/inflow from operating activities
(Note 1) (1,227,443) (24,930) 265,354
Returns on investing & servicing of finance
Interest received 189,188 155,514 478,026
Capital expenditure & financial investment
Purchase of tangible assets and expenditure on
exploration (1,885,321) (1,018,210) (5,004,772)
Acquisitions & disposals
Net cash acquired with subsidiary 0 351,453 351,453
Cash outflow before use of liquid resources &
financing (2,923,576) (536,173) (3,909,939)
Management of liquid resources
Cash placed on deposit 0 0 (9,080,000)
Cash withdrawn from deposit 3,009,011 0 0
Net cash (out)/inflow from management of liquid
resources 3,009,011 0 (9,080,000)
Financing
Net Proceeds from share issues and issue of
convertible note (net of capital raising & flotation costs) 5,269 14,076,831 13,908,886
Net cash inflow from financing 5,269 14,076,831 13,908,886
Increase in cash for the period 90,704 13,540,658 918,947
Notes to the interim results
Note 1
Reconciliation of operating loss to net cash
(out)/inflow from operating activities
Operating loss (516,533) (1,219,675) (4,310,399)
Depreciation charges 22,576 9,760 7,739
Write off of exploration 0 0 2,804,866
Flotation costs expensed 0 885,411 885,411
(Decrease)/Increase in creditors (696,096) 336,947 671,655
(Decrease)/Increase in debtors (37,390) (37,373) 206,082
Net cash (out)/inflow from operating activities (1,227,443) (24,931) 265,354
Note 2
Costs relating to equity share issues amounting to £1,620,411 were charged to
the Share Premium account in the Group's Interim Report for the period 12 April
2000 to 31 December 2000. After further consideration costs amounting to
£885,411 were charged to the Profit and Loss account during the period 12 April
2000 to 30 June 2001. The Directors believe that this treatment more
appropriately reflects the nature of costs incurred in relation to equity share
issues. Accordingly the comparative figures for the period 12 April to 31
December 2000 have been restated.
The impact of this restatement on the published interim results of the Group for
the period 12 April 2000 to 31 December 2000 was to increase the Operating Loss
and Loss on Ordinary Activities by £885,411 to £1,219,675 and £1,064,161
respectively. This adjustment had no impact upon Shareholders' Funds as at 31
December 2000.
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