Final Results
March 13 2003 - 2:30AM
UK Regulatory
RNS Number:6572I
Edinburgh Oil & Gas PLC
13 March 2003
EDINBURGH OIL & GAS plc
BUZZARD DEVELOPMENT CONTINUES TO PROGRESS
AS EOG IS AWARDED NEW OFFSHORE LICENCE
Edinburgh Oil & Gas plc announces its preliminary results for the year ended 31
December 2002.
* Buzzard oilfield recoverable reserves in excess of 400 million barrels,
over 20 million barrels net to EOG's 5 per cent interest.
* Buzzard field development plan to be submitted to DTI by mid-2003 and
first oil target mid-2006.
* Pre-tax profit of #1.0 million (including exceptional gain of #882,000
from disposal of non-producing licences) compared with #164,000 in the
previous year.
* Placing and Open Offer of 4.6 million new shares raised #5.8 million with
a further #2.3 million raised through the sale of non-core licence
interests.
* Awarded 10 per cent interest in new offshore licence covering block 20/2c
adjacent to Buzzard oilfield.
* Appointment of Brian Ramsay as Operations Director.
* Strategic objective is to continue to enhance the value of the Company
through exploration and development of oil and gas licences.
For further information, please contact:
Alf Bissett Roland Cross
Managing Director Director
Edinburgh Oil & Gas plc Broadgate
0131 225 5454 Tel: 020 7726 6111
Chairman's Statement
Appraisal and pre development work on our major asset, a 5 per cent interest in
the Buzzard oil discovery in the North Sea, continued during the year. Since
the announcement in January 2002 by the field operator, EnCana (U.K.) Limited,
that a recovery in excess of 400 million barrels from the field was anticipated,
a successful appraisal drilling programme was completed in August 2002. This
confirmed the expected oil recovery levels to be in excess of 20 million barrels
net to the Company and provided important data for the planning of the future
development well locations. Good progress has been made in evaluating both the
optimum production facility design and the oil and gas transport route. The
next key stage is submission of a field development plan to the Department of
Trade and Industry which is expected mid-2003 and the target for first oil
production is mid-2006.
The financial results for 2002 include exceptional net gains on sales of licence
interests of #882,000 resulting in pre-tax profits of #1.0 million against
#164,000 in 2001. Turnover was #3.3 million compared to #4.0 million in the
previous year. The Company's financial position was strengthened during 2002
via the raising of #5.8 million of new equity capital and the sale of non-core
licence interests for #2.3 million. We have also begun preliminary talks on debt
financing options to support the funding of our share of the Buzzard development
expenditure.
Of our major onshore interests the gas storage project at Hatfield Moors
continues to perform well and produces a steady income stream. Technical
problems with ScottishPower's electricity generation plant reduced demand for
gas from the North Yorkshire fields. This is reflected in the overall decline
in the Company's level of production from an average of 587 barrels of oil
equivalent per day in 2001 to 421 last year. The Hem Heath coal gas/electricity
generation project remains on hold as the weakness in power prices continues.
Offshore, in the 20th Licensing Round, we were awarded a 10 per cent interest in
block 20/2c which lies between the Buzzard and Ettrick oilfields.
Clarkson Moseley, having reached the age of 70, will retire as a director of the
Company at the Annual General Meeting. Clarkson has been a director since 1984
and has provided the Company with invaluable oil industry experience and on
behalf of the Board I would like to thank him most sincerely for his wise
counsel. On 12 March the Board appointed Brian Ramsay as a director of the
Company. His appointment will be put to shareholders for confirmation at the
Annual General Meeting. Brian is an experienced petroleum engineer and has been
employed as Operations Manager of the Company since July 1999.
I would like to draw your attention to the document which is being posted to
shareholders with this year's Annual Report. The document contains the Notice
of Annual General Meeting and Form of Proxy. As a matter of Special Business at
the Annual General Meeting we are proposing under Resolution 6 to update our
Articles of Association. The principal change is a proposed increase in the
Company's borrowing powers. The Board considers that the amendments to the
Articles are in the best interest of the Company and recommend that you vote in
favour.
Our objective is to continue to enhance the value of the Company through
exploration and development of our oil and gas licences. In this respect the
Buzzard project and the exploration potential of our Moray Firth licences are
key to our immediate future.
Finally I would like, on behalf of all shareholders, to once again thank the
staff for their hard work and commitment over the past year.
C H Ross
Chairman
12 March 2003
GROUP PROFIT AND LOSS ACCOUNT 2001
For the year ended 31 December 2002 2002 Restated
#000 #000
Turnover 3,296 4,043
Cost of sales (1,965) (2,382)
Depletion (689) (829)
Gross profit 642 832
Administration expenses (510) (516)
Exchange losses (11) (8)
(521) (524)
Operating profit 121 308
Gain on disposal of fixed assets 882 -
Amounts written off investments (32) -
Interest receivable 111 39
Interest payable (76) (183)
Profit on ordinary activities before taxation 1,006 164
Taxation (35) (49)
Profit for the financial year transferred to reserves 971 115
Earnings per share - basic 2.42p 0.32p
Earnings per share - diluted 2.35p 0.32p
The directors do not recommend the payment of a dividend. The Annual General
Meeting of the Company will be held on Friday 2 May 2003 at 12 noon. The 2002
Annual Report is expected to be posted to shareholders at the end of March 2003.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2002 or 2001. Statutory
accounts for 2001 have been delivered to the Registrar of Companies and those
for 2002 will be delivered following the Company's Annual General Meeting. The
auditors have reported on these accounts; their reports were unqualified and did
not contain statements under section 237(2) or (3) of the Companies Act 1985.
The results for 2001 have been restated following the adoption of Financial
Reporting Standard FRS19 "Deferred Tax".
GROUP BALANCE SHEET
As at 31 December 2002 2001
2002 Restated
#000 #000
Fixed assets
Tangible assets 15,727 14,384
Investments 156 204
15,883 14,588
Current assets
Debtors 1,222 701
Cash at bank and in hand 3,239 -
4,461 701
Creditors : amounts falling due within one year (744) (1,621)
Net current assets/(liabilities) 3,717 (920)
Total assets less current liabilities 19,600 13,668
Creditors: amounts falling due after one year (266) (1,130)
Provisions for liabilities and charges
Deferred tax provisions (1,069) (1,034)
Other provisions (1,268) (1,267)
(2,337) (2,301)
16,997 10,237
Capital and reserves
Called-up share capital 2,080 1,842
Share premium 10,467 4,900
Capital redemption reserve 3,476 3,476
Revaluation reserve 74 90
Profit and loss account 900 (71)
Equity shareholders' funds 16,997 10,237
The financial statements were approved by the Board of Directors on 12 March
2003.
GROUP CASH FLOW STATEMENT
For the year ended 31 December 2002
2002 2001
#000 #000
Net cash inflow from operating activities 477 1,314
Returns on investments and servicing of finance
Interest received 119 32
Interest paid (215) (186)
Net cash outflow from returns on investments and servicing of finance (96) (154)
Taxation - -
Capital expenditure and financial investment
Payments to acquire oil and gas assets (3,377) (1,931)
Payments to acquire other tangible assets (21) (11)
Receipts from disposal of fixed assets 2,254 -
Net cash outflow for capital expenditure and financial investment (1,144) (1,942)
Equity dividends paid - (116)
Net cash outflow before financing (763) (898)
Financing
Issue of ordinary share capital 5,805 1,042
Repayment of long term loan (990) (330)
Repayment of capital element of hire purchase contracts (98) (63)
Increase/(decrease) in cash 3,954 (249)
This information is provided by RNS
The company news service from the London Stock Exchange
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