Interim Results
September 23 2003 - 3:00AM
UK Regulatory
RNS Number:0150Q
Desire Petroleum PLC
23 September 2003
DESIRE PETROLEUM PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2003
*Resumption of exploration planned for North Falkland Basin in the austral
summer 2003-4.
*New geological model indicates at least three prospects with potential
billion barrel oil reserves.
*3-D Seismic survey on Tranches C and D programmed to refine targets
before further drilling.
*Shareholders to be offered participation in additional fund raising
through Seymour Pierce, the Company's Brokers.
For further information contact:
Dr. Colin B. Phipps 01684 892242
Dr Ian Duncan 01648 568415
Richard Redmayne 020 7107 8000
NORTH FALKAND BASIN HIGHLIGHTS
*Opportunity to control Basin-wide exploration
*Excellent entry terms
*Early drilling options
*Follow-up prospects
*Alternative play concepts
*Excellent fiscal terms
CHAIRMAN'S STATEMENT
The last six months have been important for the Group, with a number of
significant steps being taken towards the resumption of exploration in the North
Falkland Basin. In particular, a new geological model has been developed which
has identified the areas within the Basin, and below the source rock, most
likely to contain substantial reservoir rocks and traps for oil. As a
consequence, Desire has designed a 1000 sq.km., 3D-seismic survey, to be carried
out during the austral summer of 2003-4, in the Company's 100%-owned Tranches C
and D. The planned seismic survey follows widespread discussions with potential
farm-in partners who have stressed the importance of 3D-seismic in refining the
major drilling targets.
The initial drilling campaign in the North Falkland Basin encountered a very
thick, lacustrine, source rock which has proved to be the second richest yet
discovered world-wide. Calculations indicate that from 60 to 110 billion barrels
of oil have been generated and expelled from the mature section of this source
rock. At least one other, deeper, source rock was also encountered. All 6 of the
wells drilled to date were targeted at structures which proved to be above the
source rock but, because the upper, immature, section of the source rock forms
an almost complete seal across the whole of the Basin, only oil shows were
encountered. The new geological model has concentrated on identifying potential
reservoirs and structures below and adjacent to the source rock.
As a result of the world-wide slowdown in offshore drilling activity, the costs
of carrying out 3D-seismic surveys have fallen sharply. Desire is taking
advantage of these cost reductions and is currently in discussions with several
potential contractors. Potential farmees are also being offered an opportunity
to participate in the 3D-survey, although your board reserves the option to
undertake it alone.
Desire is offering potential farmees a ground-floor, seismic option to
participate in up to 50% of the 3D-seismic survey, followed by the opportunity
to participate in a drilling programme, on preferred terms, at an equivalent
percentage interest. The total cost of the 3D-survey, including all processing,
interpretation and ancillary costs, is expected to be $6-8m (#3.8-5.0m).
Desire expects to fund its own share of the 3D-survey by raising new funds
through Seymour Pierce, the Company's Brokers, via an issue in which all
shareholders will be offered the opportunity to participate.
The new geological model for the North Falklands Basin has identified a number
of major prospects along the Basin margins, which are below and adjacent to the
prolific oil-source rock encountered in the initial drilling campaign. At least
three of these prospects have the potential to contain recoverable reserves of
one billion barrels of oil should suitable reservoir rocks be present. The
geological model predicts the presence of suitable reservoirs and it is the
purpose of the 3D-seismic survey to define them as precisely as possible prior
to the next drilling campaign.
The Company's current financial resources are sufficient to cover normal
operational costs and overheads continue at a very low level. Your board will
keep shareholders informed on progress with the 3D-survey as the programme
develops.
Dr Colin B. Phipps
Chairman
Group Profit & Loss Account
for the six months ended 30 June 2003
6 months ended 6 months ended Year ended
30.6.03 30.6.02 31.12.02
#000 #000 #000
Oil exploration costs - - 46
Administrative (213) (350) (429)
expenses
------- ------ ------
Operating loss (213) (350) (383)
Interest receivable 2 4 6
------ ------ ------
Loss on ordinary
activities before
taxation (211) (346) (377)
Taxation - - -
------- ------ ------
Loss on ordinary
activities after
taxation retained for
the period (211) (346) (377)
------- ------- -------
Earnings per share
(pence) - Basic (0.19) (0.32) (0.35)
Earnings per share
(pence) - diluted (0.19) (0.32) (0.35)
Group Balance Sheet
as at 30 June 2003
As at As at As at
30.6.03 30.6.02 31.12.02
#000 #000 #000
Fixed assets
Intangible assets 2,343 2,321 2,333
Current assets
Debtors 7 8 59
Investments 1 6 6
Cash at hand and in bank 106 200 198
____ ___ ___
114 214 263
Creditors: amounts due within one
year (315) (507) (241)
____ ____ ____
Net current assets (201) (293) 22
____ ____ ____
Total assets less current
liabilities 2,142 2,028 2,355
Capital and reserves
Called up share capital 1,125 1,074 1,125
Share premium account 16,744 16,437 16,744
Merger reserve 13,343 13,343 13,343
Profit and loss account (29,070) (28,826) (28,857)
_______ _______ _______
Equity shareholders' funds 2,142 2,028 2,355
Group Cash Flow Statement
for the six months ended 30 June 2003
6 months ended 6 months ended Year ended
30.6.03 30.6.02 31.12.02
#000 #000 #000
Net cash outflow from
operating activities (84) (193) (548)
Returns on investment
and servicing of
finance
Interest received 2 4 6
Taxation
Taxation paid - - (4)
Acquisitions and
disposals
Proceeds from sale of
subsidiary - - 9
Capital expenditure and
financial investment
Purchase of intangible
fixed assets (10) (24) (36)
____ ____ ____
(92) (213) (573)
Financing
Issue of share capital
(net of expenses) - - 358
Decrease in cash in (92) (213) (215)
period
Reconciliation of 6 months ended 6 months ended Year ended
operating loss to net 30.6.03 30.6.02 31.12.02
cash outflow from #000 #000 #000
operating activities
Operating loss (213) (350) (383)
Provision against
investments 5 - -
Profit on disposal - - (10)
Exchange differences (2) - -
(Increase)/decrease in
debtors 52 31 (19)
Decrease in creditors 74 126 (136)
____ ____ ____
Net cash outflow from
operating activities (84) (193) (548)
____ ____ ____
Notes to the Interim Financial Statements
for the six months ended 30 June 2003
1 Basis of preparation
The interim financial information has been prepared on the basis of
the accounting policies set out in the accounts for the year ended
31 December 2002. The interim financial information in unaudited
but has been reviewed by the Auditors.
The financial information does not constitute statutory accounts as
defined by section 240 of the Companies Act 1985. Full accounts of
the Company for the year ended 31 December 2002 on which the
Auditors gave an unqualified report, have been delivered to the
Registrar of Companies.
2 Earnings per share
As the group reports a loss for the period then, in accordance with
Financial Reporting Standard Number 14, the share options are not
considered dilutive.
The calculation of basic earnings per share is based upon the loss
for the period and the weighted-average number of 112,500,552 (2002
- first half - 107,387,126) shares in issue during the period.
The diluted earnings per share is based upon the loss for the
period and the number of shares in issue as follows:
6 months ended 6 months ended Year ended
30.6.03 30.6.02 31.12.02
thousands thousands thousands
Weighted-average number 112,501 107,387 108,578
of shares
Dilution: Share options - - -
in issue
_______ ______ ______
112,501 107,387 108,578
3 Taxation
Taxation comprises a provision for taxation on the interest
receivable less any allowable expenses and any adjustment for over
or under provision in prior periods. On the basis of these accounts
no provision for taxation is appropriate.
4 Copies of report
Copies of this interim statement will be despatched to shareholders
and will be available to the public at the Registered office,
Mathon Court, Mathon, Malvern, Worcestershire WR13 5NZ
This information is provided by RNS
The company news service from the London Stock Exchange
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