RNS Number:6706X
Caspian Holdings plc
01 June 2007
1 June 2007
CASPIAN HOLDINGS PLC
("Caspian" or "The Company")
Preliminary Results for the year to 31 December 2006
Caspian Holdings Plc (AIM:CSH) the London-based AIM-quoted Company whose primary
activity is the exploration, development and operation of oil fields in the
countries around the Caspian Sea, and in particular Kazakhstan, announces its
preliminary results for the year ended 31 December 2006.
Highlights
* Revenue increased 373% to #1.5million (2005: #318,578)
* Nine new wells drilled
* Commencement of export sales
Post year end highlights
* Drawdown of an unsecured credit facility from investors & shareholders
raising #650,000
* New team established to focus on project generation and acquisitions
Commenting on the results, Michael Masterman, Executive Chairman, said:
"Although 2006 has proved to be a mixed and challenging year for the company,
our aim is to continue to improve our results throughout 2007 and focus our
energy into pursuing new project generation and acquisition. We look forward to
a positive outcome."
- Ends -
Chairman's Statement and Financial Statements follow. A full version of these
accounts is available on the Company's website www.caspianoil.co.uk
For further information, please contact:
Caspian Holdings Plc Hoodless Brennan Parkgreen Communications
Michael Masterman Luke Cairns Justine Howarth/Clare Irvine
T: +44 7791288381 T: +44 (0) 20 7538 1166 T: +44 (0) 20 7851 7480
CHAIRMAN'S STATEMENT
2006 has proved to be a mixed year for Caspian Holdings Plc.
Revenue for the year increased 373% to #1.5 million reflecting the switch to
export sales, improved production and high oil prices. To support exports a new
export facility is under construction at Karsak and key export contracts are in
place with KazTransOil and KazMunayGaz. Exports continued into 2007 with a
temporary suspension during the second quarter in order to meet domestic sales
quotas and other regulatory requirements and is expected to recommence in the
third quarter.
On an operational front, extensive activity was conducted on the Zhengeldy field
with nine new wells drilled (101, 102, 103, 105, 104, 109, 118, 119 and 121) and
extensive workovers conducted on a further seven wells (114, 112, 115, 101, 113,
102, 103). Five of the new wells drilled (121, 119, 105,102 and 103) returned
good log results and commercial production. Log and test results from the other
new wells were poor and production has been marginal. The workover program,
while producing some initially positive results, has overall been disappointing,
as a result of difficulties with cementation in the early wells. Well
completion including cementation has been greatly improved in recent wells.
Following extensive review, it is clear to the Board that while Zhengeldy
retains commercial potential, this potential can best be pursued after an
expansion of the licence area. While the results of the 2006 drilling program
have been mixed and have not resulted in a sustained increase in production, the
company has been able to successfully drill, at low cost, a number of wells (for
example 121 and 119) with 20 meter pay zones, good completion and good
production. The company now has a very clear view of the geological,
operational and economic model necessary for success. Further development
however requires an expansion of the licence area.
The Zhengeldy licence expansion has been a frustrating exercise with delays
caused by a number of changes in ownership of the surrounding exploration
licence during the year. There is now ownership stability of the adjacent
licence and this stability provides a basis for the company to seek to reach
commercial agreement during the balance of 2007.
The Company has taken the decision to focus it's energy and resources in
pursuing new project generation and acquisition. A dedicated project team has
been established and the company is actively pursuing oil and gas projects in
the former Soviet Union and other leading oil provinces.
The Company strengthened it's balance sheet in April 2007 with an unsecured
credit facility agreement to raise up to #1 million from investors and major
shareholders. #650,000 of this facility has been drawn. This loan is a short
term facility to fund working capital requirement of the Taraz operations, and
new project acquisition activities at the Caspian level. It is intended that the
facility is replaced with more permanent funding arrangements upon the extension
of the Zhengeldy licence area or execution of a new project acquisition.
The 2006 year financials attached to this report show revenue growing
substantially as a result of improved production to 2005 and export sales with
revenue of #1,508,015 (2005: #318,578). As a result of the mixed performance of
the Zhengeldy oil field, the Company has considered the recoverability of it's
investment in the fixed assets of Taraz related to drilling activities and has
decided to write-off #606,177 against the carry value of wells for 2006 and to
write off the goodwill on acquisition of Taraz of #980,987. After accounting for
these writedowns the loss after taxation for the 2006 financial year of
#3,412,588 (2005: #1,183,876 loss).
Following the year end of the Company, a significant focus at Zhengeldy has been
to push the operation to sustainable profitability. Significant progress toward
this objective has been made reducing and consolidating the cost structure.
Further progress towards this objective will be made with the expected
recommencement of export sales in the third quarter of 2007.
In closing I would like to thank the management, in particular Igor Borisov,
Dietmar Greil, and Dom Del Borrello for their efforts in dealing with difficult
operating conditions. I would also like to thank the non executive Directors
who have strongly supported the company throughout this challenging period, and
we look forward to positive results in the year ahead.
CASPIAN HOLDINGS Plc
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
2006 2005
REVENUE 1,508,015 318,578
Cost of sales (936,578) (428,497)
GROSS PROFIT/(LOSS) 571,437 (109,919)
Administrative expenses (3,289,610) (1,299,637)
OPERATING LOSS (2,718,173) (1,409,556)
Exchange (losses)/gains in year (595,594) 161,658
Adjustment in fair values of fixed assets (52,864) -
Provisions created in period (88,795) -
Finance income 57,648 82,788
Finance costs (14,810) (18,766)
LOSS BEFORE TAX (3,412,588) (1,183,876)
Tax - -
RETAINED LOSS FOR THE
FINANCIAL YEAR #(3,412,588) #(1,183,876)
Basic and diluted loss per share 3.6p 1.4p
CASPIAN HOLDINGS Plc
GROUP BALANCE SHEET
31 DECEMBER 2006
2006 2005
ASSETS
NON-CURRENT ASSETS
Goodwill 326,998 1,307,985
Intangible assets 528,327 662,146
Property, plant and equipment 3,196,870 2,135,393
4,052,145 4,105,524
CURRENT ASSETS
Inventories 296,268 16,349
Trade and other receivables 767,890 425,168
Cash and cash equivalents 200,652 477,747
1,264,810 919,264
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 519,797 330,705
Financial liabilities - borrowings
Interest bearing loans and borrowings 1,753 6,423
Provisions 108,186 29,859
629,736 366,987
NET CURRENT ASSETS 635,074 552,277
NON CURRENT LIABILITIES
Trade and other payables 98,728 117,870
Financial liabilities - borrowings
Interest bearing loans and borrowings - 8,524
98,728 126,394
NET ASSETS #4,588,541 #4,531,407
SHAREHOLDERS EQUITY
Called up share capital 98,699 84,492
Share premium account 9,474,645 6,227,445
Revaluation reserve 24,945 -
Translation reserve 183,370 -
Profit and loss account (5,193,118) (1,780,530)
TOTAL EQUITY #4,588,541 #4,531,407
CASPIAN HOLDINGS Plc
COMPANY BALANCE SHEET
31 DECEMBER 2006
2006 2005
ASSETS
NON CURRENT ASSETS
Investments 1,145,146 1,145,146
CURRENT ASSETS
Trade and other receivables 7,023,985 4,196,774
Cash and cash equivalents 106,964 453,677
7,130,949 4,650,451
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 120,336 35,382
NET CURRENT ASSETS 7,010,613 4,615,069
NET ASSETS #8,155,759 #5,760,215
SHAREHOLDERS' EQUITY
Called up share capital 98,699 84,492
Share premium account 9,474,645 6,227,445
Profit and loss account (1,417,585) (551,722)
TOTAL EQUITY #8,155,759 #5,760,215
CASPIAN HOLDINGS Plc
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
2006 2005
Cash flows from operating activities
Cash generated from operations (1,232,898) (1,059,797)
Finance cost (14,810) (18,766)
Net cash from operating activities (1,247,708) (1,078,563)
Cash flows from investing activities
Proceeds from disposal of fixed assets 1,345 -
Purchase of intangible fixed assets (312,123) (188,430)
Purchase of tangible fixed assets (2,024,468) (1,571,392)
Finance income 57,648 82,788
Net cash from investing activities (2,277,598) (1,677,034)
Cash flows from financing activities
Share issue 3,261,407 140,300
Repayment of financial liabilities - borrowings
Interest bearing loans and borrowings (13,196) (7,541)
Net cash from financing activities 3,248,211 132,759
(Decrease)/Increase in cash and cash equivalents (277,095) (2,622,838)
Cash and cash equivalents at beginning of year 477,747 3,100,585
Cash and cash equivalents at end of year #200,652 #477,747
CASPIAN HOLDINGS Plc
NOTES TO THE GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
1. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
2006 2005
Operating loss (2,718,173) (1,409,556)
Exchange gains/(losses) in period (648,986) 161,658
Translation adjustments 183,370 (63,202)
Translation adjustments relating to fixed assets 215,294 125,258
Loss on disposal of tangible assets 738 -
Depreciation charges 604,513 143,210
Impairment losses 1,587,164 -
(Increase)/decrease in inventories (279,919) 56,120
(Increase) in trade and other receivables (342,722) (122,665)
Increase/(decrease) in trade and other payables 169,951 23,618
(Decrease)/increase in other provisions (4,128) 25,762
Net cash outflow
from operating activities #(1,232,898) #(1,059,797)
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the cash flow in respect of cash and cash equivalents
are in respect of these balance sheet amounts.
Year ended 31 December 2006 31.12.06 01.01.06
Cash and cash equivalents #200,652 #477,747
Year ended 31 December 2005 31.12.05 01.01.05
Cash and cash equivalents #477,747 #3,100,585
This information is provided by RNS
The company news service from the London Stock Exchange
END
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