RNS Number : 2429X
Bramlin Limited
23 June 2008
Bramlin Limited
("Bramlin" or "the Company")
Preliminary Results for the year ended 31 December 2007
Bramlin is a Guernsey-based oil and gas company with a 60% working interest in the Logbaba onshore natural gas field near Douala, the
principal port city of Cameroon. Bramlin's shares are traded on the Alternative Investment Market ("AIM") in London.
Operating Highlights
* Raised �3.4m gross (�3.2m net) and admitted to AIM on 18 January 2007
* Completed acquisition of Rodeo Development Limited on 10 December 2007, bringing with it a 60% share in the Logbaba exploration
licence near Douala in Cameroon
* At end 2007, the Bramlin Group proven and probable reserves amounted to nearly 65 billion cubic feet of natural gas and 2.4
million barrels of condensate and naturals gas liquids
* Commenced negotiations for sales of gas into local Douala industrial market
* Opened negotiations to extend the Logbaba exploration licence and convert it into an exploitation licence, an essential precursor
to developing the field
Financial Highlights
* Bramlin consolidated net loss was �345,730 (2006: �3,180 profit)
* Loss per share for the year was 0.80p (2006: 0.10p earnings per share)
* Cash at 31 December 2007 amounted to �2.1 million (2006 �2.75m)
* Comparatives for 2006 are for the eight month period from incorporation to 31 December 2006
2008 Outlook
Management focus for 2008 will be to:
* Secure extension of the Logbaba exploration licence
* Negotiate and sign natural gas sales agreements
* Complete all preliminary steps required for development of the field
* Commence development of the Logbaba field, comprising drilling two wells twinned with existing discovery wells, installing gas
processing plant and building a pipeline to connect the field with local industrial energy users
Date: 20 June 2008
For further information contact:
Bramlin Limited
Jim Ford, Chief Executive Tel: +1-713-523-6336
Ernie Miller, Commercial Director Tel: +1-713-523-6336
Alan Thomas, Finance Director Mob: +44-7739-800093
Strand Partners Limited
Simon Raggett/Angela Peace Tel: +44-207-409-3494
Bramlin is listed on AIM. Further details about the Company and downloadable copies of this announcement are available on the Company's
website: www.bramlin.com. The annual report will be mailed to shareholders shortly and the Annual General Meeting of the Company will be
held on 21 July 2008.
CHAIRMAN'S LETTER TO SHAREHOLDERS
Dear Fellow Shareholders,
I should like to take this opportunity to summarise Bramlin's achievements in its first year of operation, our current plans and
activities and to discuss the local and international environment we work in. I would also like to outline for you the longer term plans for
Bramlin and how we intend to increase shareholder value.
Background
Bramlin was admitted to AIM in January 2007 and our purpose is to make investments and acquisitions in the energy and mining sectors.
Our first deal was announced in November 2007 when we acquired Rodeo Development Limited ("RDL"). RDL has a 60% working interest in and is
operator of the 64 km2 Logbaba gas field exploration licence in the eastern suburbs of Douala, the main port city of Cameroon. The other
partner in Logbaba is RSM Production Corporation ("RSM"), an affiliate of Grynberg Petroleum Co in the USA. This transaction was detailed in
the AIM re-admission document of 22 November 2007. In essence we acquired RDL and its interest in Logbaba for approximately 118 million
shares in Bramlin, of which 24 million shares are deferred consideration subject to certain conditions, including successful granting of an
exploitation licence from the Government of Cameroon. Importantly, the key management and technical teams of RDL lead by Jim Ford and Ernie
Miller, two of our directors, came with this deal so Bramlin had a management and development group for this project already in Cameroon.
The Logbaba Field
The Logbaba Field is located in the Northern Douala Basin, which lies to the southeast of the Niger Delta, a prolific petroleum
province. In 1954, the French company Elf SEREPCA, which was looking for oil, drilled the first well near Douala and they encountered two
over pressured sandstone reservoirs in the upper cretaceous between 1600-1800m depth. The well "blew out" and flowed out of control for over
a month before being stabilised. Subsequent controlled tests flowed at 15.5 mmcf/d. Three other wells were drilled with all indicating gas.
Two of these wells were tested for gas but the third was not as there was no market for gas at the time. As part of Bramlin's assessment, it
contracted independent reservoir engineers RPS Energy ("RPS") to complete a report and valuation in the form of a Competent Persons Report.
The full report was published in the Company's November 2007 AIM re-admission document. Table 1 below shows the reserves estimates extracted
from the RPS report.
Gross Estimate Net Attributable
Logbaba Field Proved Proved plus Probable Proved plus Probable Proved Proved plus Probable Proved plus Probable
plus Possible plus Possible
Condensate 0.17 1.78 3.42 0.12 1.12 2.09
NGL 0.20 2.05 3.95 0.14 1.29 2.41
Total for Liquids 0.37 3.83 7.37 0.26 2.41 4.50
Gas Reserves 10.04 104.88 202.39 7.00 65.87 123.71
Total for Gas 10.04 104.88 202.39 7.00 65.87 123.71
Table 1 - Reserves Estimates, (MMbbls, for liquids, and Bscf, for gas)
The exploration licence is held by RSM and RDL, through a farm in agreement, under which RDL has committed to drill two new wells on the
licence to retain its 60% interest. We intend to produce gas, gas condensate and natural gas liquids (NGLs) for the local market.
The Market
Cameroon currently has no natural gas supply. Bramlin commissioned a gas marketing study in 2007 which indicated that about 3Bcf per
year of demand exists, with the market expected to grow by about 4.5% per year. These levels would support an estimated sales price of at
least US$10.00 per Mcf. We are planning a two train gas processing facility with up to 25mmcf/d capacity from our first two wells and our
marketing studies show that approximately 16 mmcf/d could be sold to existing industrial energy users within the Douala area. The Company is
also looking at electricity supply as Cameroon currently depends on hydro-electric power for 65% of its power, with the remaining 35% being
imported from nearby Nigeria. Only 5% of the rural population and 65% of urban dwellers have access to electricity. We believe there are
opportunities in the power generation sector that could flow from the progressive development of the Logbaba field.
Financial Results
For the year to 31 December 2007 the Group incurred a loss of �345,730 against a small profit of �3,180 in 2006. The majority of these
expenses represent London office costs including rental, professional fees and costs of negotiating the RDL transaction.
Current Activities
Our management are focussed on activities that will secure our exploitation licence and enable us to drill and develop the field. These
include:
* Funding options for the field development stages
* Environmental and Social Impact Assessment (ESIA)
* Land access work associated with the acquisition of surface rights for drilling and production operations;
* Securing an extension to the exploration licence term
* Contracting and mobilising a drilling rig
* Negotiating a gas sales agreement
RDL is working closely with the state oil company, Societe Nationale des Hydrocarbures (SNH), and the Ministry of Industry, Mines, and
Technological Development in Cameroon to manage stakeholder concerns and expectations and to ensure that the project is developed according
to Cameroon Law. The Logbaba project is of particular importance to the Republic of Cameroon because it represents the first opportunity to
establish a natural gas market for industrial users in Cameroon. RDL has worked closely with Tradex, the marketing arm of SNH, to understand
the potential market and formulate a plan to capture it. RDL enjoys strong support from all levels of the Government and related agencies in
its efforts to commercialise the Logbaba natural gas field.
Outlook
Oil and gas prices continue to reach new peaks and Bramlin is well placed to be a significant player in the natural gas and liquid
condensate sector in West Africa. Cameroon is energy hungry and the location of Logbaba in the commercial and industrial centre of this
country is most fortuitous. Looking forward, RDL hopes to secure a gas sales agreement and complete the ESIA and associated land access
approvals in the second half of 2008. These steps should allow RDL to commence drilling activities in late 2008 to early 2009, with
commercial sales of natural gas commencing in late 2009. Securing funding for these developments will be an important activity in the second
half of 2008.
I should like to thank the management and staff for a successful first year of operations and we look forward with confidence to
achieving our targets and enhancing the value of your company.
Kevin Foo
Chairman
Consolidated Income statement
for the year ended 31 December 2007
Notes Year Period
Ended Ended
31-Dec-07 31-Dec-06
� �
Revenue - -
Cost of sales - -
Gross profit - -
Administrative expenses (513,293) (2,130)
Operating (loss) (513,293) (2,130)
Finance income 166,200 6,673
(Loss)/profit before taxation (347,093) 4,543
Taxation 1,363 (1,363)
(Loss)/profit for the period (345,730) 3,180
Basic and diluted (loss)/earned per share 3 (0.80)p 0.10p
consolidated statement of recognised income and expenses
for the year ended 31 December 2007
Year Period
Ended Ended
31-Dec-07 31-Dec-06
� �
(Loss)/profit for the period (345,730) 3,180
Foreign currency 643,306 -
Total recognised income for the period 297,576 3,180
CONSOLIDATED Balance sheet
for the year ended 31 December 2007
Notes 31-Dec-07 31-Dec-06
� �
Non-current assets
Exploration and evaluation assets 4 43,560,994 -
Plant and equipment 20,770 -
Investments - -
Total non-current assets 43,581,764 -
Current assets
Trade and other receivables 36,502 42,287
Current tax receivables 53,216 -
Cash and cash equivalents 2,087,201 2,753,009
Total current assets 2,176,919 2,795,296
Total Assets 45,758,683 2,795,296
Current liabilities
Trade and other payables (1,549,349) (2,745,753)
Loan notes payable 5 (342,056) -
Current tax payables - (1,363)
Total current liabilities (1, 891,405) (2,747,116)
Non-current liabilities
Reserve bonus liability 6 (4,231,152) -
Deferred tax liabilities 7 (15,074,941) -
Total non-current liabilities (19,306,093) -
Total liabilities (21,197,498) (2,747,116)
NET ASSETS 24, 561,185 48,180
Equity
Share capital 1,328,540 45,000
Share premium account 18,660, 860 -
Shares to be issued 4,271,029 -
Currency reserves 643,306 -
Retained (losses)/earnings (342,550) 3,180
TOTAL EQUITY 24, 561,185 48,180
CONSOLIDATED Cash Flow statement
for the year ended 31 December 2007
Notes Year Period
Ended Ended
31-Dec-07 31-Dec-06
Cash flows from operating activities � �
Net cash (used in) operating activities 8 (2,116,243) (44,417)
Cash flows from investing activities
Acquisition of subsidiary, net of cash (1,931,737) -
acquired
Purchases of property, plant and equipment (11,032) -
Purchases of intangible assets (18,701) -
Loans granted to subsidiary undertakings - -
Interest received 166,200 6,673
Net cash (used in) investing activities (1,795,270) 6,673
Cash flows from financing activities
Amounts received in advance in respect of - 2,745,753
issue of ordinary shares
Proceeds from issuance of ordinary shares 3,245,287 45,000
Net cash generated from financing activities 3,245,287 2,790,753
Net (decrease)/increase in cash and cash (666,226) 2,753,009
equivalents
Cash and cash equivalents at beginning of 2,753,009 -
period
Exchange gains/(losses) on cash and cash 418 -
equivalents
Cash and cash equivalents at end of period 2,087,201 2,753,009
NOTES TO THE FINANCIAL INFORMATION
for the year ended 31 December 2007
1 Presentation of financial information
The summary accounts set out above do not constitute statutory accounts as defined by section 240 of the UK Companies Act 1985. The
summarised consolidated balance sheet at 31 December 2007, the summarised consolidated income statement and the consolidated statement of
cash flows as well as the consolidated statement of recognized income and expenses for the year then ended have been extracted from the
Group's audited Annual Report and Financial Statements for the year ended 31 December 2007 upon which the auditors' opinion is unqualified.
The statutory accounts for the year ended 31 December 2007 were approved by the Directors on 20 June 2008.
2 Accounting policies
Basis of preparation
Bramlin Limited, an AIM listed entity, adopted International Financial Reporting Standards (IFRS) as the basis for its financial
statements from 1 January 2007, with a transition date of 12 May 2006 when it was incorporated. The financial information has been prepared
under the historical cost convention in accordance with applicable Accounting Standards. The Group has not presented reconciliations of UK
GAAP to IFRS as required by IFRS 1, "First time adoption of International Financial Reporting Standards" as there are no material
reconciling items.
New standards and interpretations
At the date of approval of these financial statements, the following Standards and Interpretations which have not been applied in these
financial statements were in issue but not yet mandatorily effective.
International Financial Reporting Standards
Effective date (periods
commencing)
IFRS 8 Operating segments 1 January 2009
IAS 23 (amendment) Borrowing costs 1 January 2009
IAS 1 (amendment) Presentation of 1 January 2009
financial statements
IFRS 3 (revised) Business 1 July 2009
combinations
IAS 27 Consolidated and 1 July 2009
separate financial
statements
International Financial Reporting Interpretations
IFRIC 11 IFRS 2 - Group and treasury share transactions
IFRIC 12 Service concession arrangements
IFRIC 13 Customer loyalty programmes
IFRIC 14 IAS 19 - The limit on a defined benefit asset, minimum funding
requirements and their interaction
The Directors do not anticipate that the adoption of these statements and interpretations will have a material impact on the Company's
financial statements in the period of initial application.
Consolidation
Subsidiaries
The Group financial statements consolidate the financial statements of the Company and its subsidiaries, all of which are 100% owned and
controlled. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
commences until the date control ceases. Control is achieved where the Company has the power to govern the financial and operating policies
of an investee entity so as to obtain benefits from its activities.
Acquisitions of subsidiaries are accounted for under the purchase method. The cost of an acquisition is measured as the fair value of
the consideration given and liabilities incurred or assumed, as at the date of acquisition, plus costs directly attributable to the
acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the Group's share of
the net assets acquired is recorded as goodwill.
Joint ventures
Oil and gas exploration, evaluation, development and production activities are generally conducted in incorporated or unincorporated
joint ventures. The Group accounts for its share of the results and net assets of these joint ventures as jointly controlled assets. Where,
as in Cameroon, the Group acts as operator of the joint venture, the gross liabilities and receivables of the joint venture, including
amounts due to or from non-operator partners are included in the Group consolidated balance sheet.
Going concern
After making enquiries, the Directors have formed a judgment at the time of approving the financial statements that there is a
reasonable expectation that the Company and Group as a whole have adequate resources to continue in operational existence for the
foreseeable future. For this reason the Directors have adopted the going concern basis in preparing the financial statements. In order to
develop the Logbaba gas field, it will be necessary to raise further funds. If further funds cannot be raised, then an impairment provision
may be necessary to reduce the exploration and evaluation assets to net realisable value.
Oil and gas exploration evaluation and development expenditure
Oil and gas exploration evaluation and development expenditure is accounted for using the successful efforts method of accounting.
Exploration and evaluation assets comprise expenditures which are directly attributable to acquiring, researching and analysing
exploration data. They also include the costs incurred in acquiring mineral rights, the entry premiums paid to gain access to areas of
interest and amounts payable to third parties to acquire interests in existing projects.
When it has been established that a mineral deposit has development potential, all costs (direct and applicable overhead) incurred in
connection with the exploration and development of the mineral deposits are capitalised until either production commences or the project is
not considered economically viable. In the event of production commencing, the capitalised costs are amortised, through administrative
expenses, over the expected life of the mineral reserves on a unit of production basis.
Other pre-trading expenses are written off as incurred. Evaluation and exploration expenditure is only capitalized after the exploration
license has been received. Where a project is abandoned or is considered to be of no further interest the related costs are written off
3 (Loss)/Earnings per 2007 2006
share � �
(Loss)/earnings
(Loss)/earnings for
the purposes of (345,730) 3,180
basic
(loss)/earnings per
share being net
(loss)/profit
attributable to
equity shareholders
Number of shares
Weighted average
number of ordinary 43,028,988 3,186,697
shares for the
purposes of basic
(loss)/earnings per
share
24,062,134 ordinary shares are expected to be issued, when
certain condition are met, under the deferred consideration
terms of the RDL acquisition agreement. In addition, an
aggregate of 2,514,029 shares were issued after the balance
sheet date in relation to share-based payments to professional
advisers and application of fees earned by Directors in 2007 to
subscription for ordinary shares. No diluted loss per share is
presented as the effect of including the additional shares would
be to decrease the loss per share.
4 Exploration and
evaluation assets
Cost or fair value �
At 12 May 2006 & 1 -
January 2007
Additions 18,701
Acquisition of RDL 42,365,356
at fair value
Foreign exchange 1,176,937
At 31 December 2007 43,560,994
The fair value of exploration and evaluation assets acquired
through the acquisition of RDL was determined by reference to
the Group's accounting policy for acquisitions of subsidiaries,
as set out on pages 7 and 8.
5 Loan notes payable
The loan notes payable comprise USD 331,000 of non interest bearing loan notes issued by the Company as part
of the consideration for the acquisition of RDL, and USD 350,000 of non interest bearing promissory notes
issued by RDL and assumed by the Group on the acquisition. Both notes are repayable from the proceeds of the
Group's first significant fund-raising. Since the Directors expect to seek finance for the Logbaba field
development later in 2008, the liabilities are deemed to be repayable within one year and the carrying
amount is considered to approximate to the fair value.
6 Reserve bonus
liability
The liability arises under a reserves bonus agreement with Rodeo Resources Inc on the Logbaba gas field. The
amount of the liability will be calculated four years after commencement of hydrocarbon production by
reference to reserves of the field, as assessed at that time, with a maximum amount of USD 10million
(�5.0million). The Directors are of the view that there is reasonable probability of the Logbaba field being
developed and having sufficient reserves, as defined in the agreement, to trigger the maximum payment
approximately five years after the balance sheet date. The liability does not attract interest until it
becomes due. Accordingly the maximum liability has been recognised, discounted by reference to USD 5-year
interest rates, which is considered to approximate to the fair value.
The reserve bonus payment constitutes a financial liability held at amortised cost, designated as such upon
initial recognition, as defined by IAS 39.
7 Deferred tax liabilities 2007 2006
Group � �
1 January 2007 Nil -
Transfer on fair value adjustment 14,667,531 -
Foreign Exchange 407,410 -
At 31 December 2007 15, 074,941 -
8 Cash used in operations Group
2007 2006
� �
Operating loss (513,293) (2,130)
Depreciation (note 13) 703 -
Foreign exchange losses on operating activities 4,493 -
Changes in working capital (excluding the effects
of acquisitions and exchange differences on
consolidation
- Trade and other receivables (23,317) (42,287)
- Trade and other payables (1,584,829) -
Cash used in operations (2,116,243) (44,417)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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