RNS Number:1558L
Europa Oil & Gas (Holdings) PLC
18 April 2005
For immediate release
EUROPA OIL & GAS (HOLDINGS) PLC
("EUROPA")
2005 INTERIM RESULTS
ON TRACK TO MEET PRODUCTION TARGETS
18 APRIL 2005
Europa Oil & Gas (Holdings) plc, the independent oil & gas exploration and
production group with assets in the UK and continental Europe today announces
its interim results for the six months ended 31 January 2005.
Financial Highlights
* Turnover of #1.178m (18 months to 31 July 2004 #1.952m)
* Operating profit of #0.415m (18 months to 31 July 2004 #0.694m)
* Profit after tax of #0.162m (18 months to 31 July 2004 #0.298m)
* Net cash of #3.35 million at 31 January 2005
* Net assets of #8.09 million
* Earnings per share of 0.33p
Operational Highlights
* Production from the UK and Ukraine during the period averaged 308 barrels
of oil equivalent per day (boepd)
* Successful drilling of Bilca-2 in Romania to prove up additional reserves
to the west of the Bilca-1 well
* Secured approval for two development wells on the West Firsby Field, UK
Placing & Admission to AIM
* During November 2004 Europa successfully floated on AIM and completed a
placing of 20,000,000 shares at 25p each that raised #4.29m after
expenses. At the time of the placing, one warrant for every two shares
placed was also issued
Recent Events & Current Outlook
* Drilling of the West Firsby-8 well, UK
* Favourably revised terms on a loan from Gemini Oil & Gas to reflect the
100% funding by Europa on the West Firsby 8 well.
* Costisa-1 well in Romania spudded in early February 2005
* Fratauti-1 well in Romania spudded in late March 2005
* Geochemical survey on licence PEDL150 near the Whisby field, UK
* Development planning for the Bilca and Bilca West gas discoveries
underway
* Quad 41 preliminary engineering studies in progress
* Exercise of 1,065,000 warrants raising an additional #319,500 and
increasing the total ordinary shares in issue to 61,065,000
Chairman's Statement
The six months to 31 January 2005 have been an eventful and exciting period for
the Company. In November 2004, the Company was admitted to AIM and completed a
#5 million fundraising. This provided the Company with the funds to begin to
realise the value of its existing projects and secure additional opportunities
for future growth. Against this backdrop, the operating environment for Europa
has improved with the benefit of continued high commodity prices from its UK
onshore oil production, positive political changes in Ukraine and signs of a
more market orientated gas-pricing regime in Romania.
Romania
The Bilca-1 and Bilca-2 gas discoveries in the EIII-1 Brodina concession have
added 4bcf of net proven reserves and moved to the detailed development-planning
phase. The partners have identified a number of similar sized prospects close to
Bilca. One of these, Fratauti-1, has been drilled and is currently undergoing
testing. Results are expected shortly and, if successful, the well will be
included in the ongoing Bilca gas project. The development concept for Bilca
will allow for any future discoveries in the area to be tied into the proposed
facilities. The operator, Falcon, has indicated that full project consent will
be sought by late Summer 2005 with first production anticipated in early 2006.
Currently, Romanian domestic gas production is sold at a 20% discount to the
previous year's import price resulting in a 2006 price of $4.30 per thousand
cubic feet (mcf). There are strong signals that the 20% discount will reduce
substantially with Romanian entry into the European Union in 2007 resulting in
an improved gas price.
Seismic acquisition is planned to the south of the Bilca/ Fratauti area to
evaluate this low risk play further.
On the EPI-3 Brates concession, the Costisa-1 well is currently being drilled.
This is a deep well with an expected total depth of 4,100 metres and will take
some time to complete. This is an exciting large potential prospect, targeting
multiple reservoirs in the Carpathian sub thrust.
Additional seismic acquisition on EIII-3 Cuejdui and EIII-4 Bacau is expected in
late 2005.
United Kingdom
In the UK North Sea, the Company is moving forward with the 100% operated gas
condensate discoveries in blocks 41/24 and 41/25 offshore Scarborough and
presently undertaking engineering studies. The Company is tendering for a vessel
to acquire 3D seismic in the second half of 2005 that will be used to identify
development well locations.
The Company has also been active on the recently awarded acreage from the 12th
onshore licensing round completing the acquisition of a geochemical survey on
PEDL 150 over the exploration area adjacent to the Whisby Field. The results of
this survey are expected shortly and will aid in investigating the extent of the
Loxley Edge oil accumulation discovered in the 2003 Whisby 4 well. The Holmwood
prospect, on PEDL 143, also awarded in the 12th round, is ready to drill. The
Company is currently progressing various planning issues and has identified a
suitable drilling location for testing Holmwood. Each of these prospects has the
potential to more than double the existing proven reserve base of the Company.
The excellent number 4 well on the Whisby field produced an average net 136
barrels of oil per day (bopd) during the six month period. Europa recently
completed a sidetrack of the West Firsby 8 well. It is too early to quantify the
results of the new well, but 330ft of net reservoir sands were penetrated and we
expect the new well to contribute to field production from April.
Ukraine
The pilot production on the Horodok gas field averaged a net 38 boepd during the
six months and the Company is currently awaiting the transition to a full
production licence. Further low risk but high reward opportunities are being
pursued to take advantage of our experience and operating capability in the
region.
Future prospects
The Company is well on the way to its targeted production of 1,000 boepd in 2006
and the exploration programme is also moving forward. The Directors feel
confident about the Company's future prospects.
Sir Michael Oliver
Chairman
18 April 2005
For further information, contact:
Europa Oil & Gas (00 33 563 33 18 97)
Paul Barrett
Citigate Dewe Rogerson (020 7638 9571)
Martin Jackson/George Cazenove/Rachel Lankester
Westhouse Securities LLP (020 7601 6100)
Tim Feather
Also see www.europaoil.com
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the period ended 31 January 2005
18
6 Months Ended
Months Ended 31 31 July
January 2004
2005
# #
Turnover 1,177,682 1,952,051
Cost of sales
- Operating costs (249,580) (476,745)
- Depletion and amortisation (323,778) (665,722)
Gross profit 604,324 809,584
Administrative expenses (189,278) (115,900)
Operating profit 415,046 693,684
Interest receivable 120,742 493
Interest payable and similar charges (372,375) (375,594)
Profit on ordinary activities before taxation 163,413 318,583
Tax on profit on ordinary activities (1,416) (20,539)
Retained profit for the financial year 161,997 298,044
Basic Earnings per share 0.33p 0.75p
Diluted Earnings per share 0.33p 0.75p
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the period ended 31 January 2005
18
6 Months Ended
Months Ended 31 July
31 January 2004
2005
# #
Profit on ordinary activities after taxation 161,997 298,044
Currency translation difference on foreign currency net investment 8,005 (2,462)
Total recognised gains and losses relating to the period 170,002 295,582
CONSOLIDATED BALANCE SHEET as at 31 January 2005
18
6 Months Ended 31
Months Ended 31 July
January 2004
2005
# #
Fixed assets
Intangible assets 3,329,177 2,958,861
Tangible assets 2,823,699 3,019,071
6,152,876 5,977,932
Current assets
Debtors 347,475 284,433
Cash at bank and in hand 3,347,651 48,789
3,695,126 333,222
Creditors: amounts falling due within one year (287,736) (3,792,621)
Net current assets/ (liabilities) 3,407,390 (3,459,399)
Total assets less current liabilities 9,560,266 2,518,533
Creditors: amounts falling due after more than one year (1,203,513) (1,191,158)
Provision for liabilities and charges (263,286) (300,000)
Net assets 8,093,467 1,027,375
Capital and reserves
Called up share capital 600,000 1,000
Share premium 4,098,483 669,425
Merger Reserve 2,868,032 -
Profit and loss account 526,952 356,950
Shareholders' funds 8,093,467 1,027,375
CONSOLIDATED CASH FLOW STATEMENT
For the period ended 31 January 2005
18
6 Months Ended
Months Ended 31 31 July
January 2004
2005
# #
Net cash inflow from operating activities 249,201 1,005,076
Returns on investments and servicing of finance
Interest received & similar income 120,743 493
Interest paid & similar charges (372,376) (375,594)
Net cash outflow from returns on investments and servicing of (251,633) (375,101)
finance
Taxation
Tax paid (2,023) (29,343)
Net cash outflow from taxation (2,023) (29,343)
Capital expenditure
Purchase of fixed assets (469,926) (3,379,586)
Net cash outflow from capital expenditure (469,926) (3,125,576)
Net cash outflow before financing (474,381) (2,778,954)
Financing
Loans (redeemed)/ received (2,820,567) 2,511,478
Issue of share capital 6,896,090 -
Net cash inflow from financing 4,075,523 2,511,478
Increase/ (decrease) in cash in the year 3,601,142 (267,476)
CONSOLIDATED CASH FLOW STATEMENT
For the period ended 31 January 2005
Reconciliation of operating profit to net cash outflow from operating activities
18
6 Months Ended
Months Ended 31 July
31 January 2004
2005
# #
Operating profit 415,046 693,684
Depreciation 325,324 665,722
(Increase)/ decrease in debtors (63,045) 93,391
(Decrease) in creditors (391,410) (747,721)
Increase/ (decrease) in Provision (36,714) 300,000
Net cash inflow from operating activities 249,201 1,005,076
Reconciliation of net cash flow to movement in net (debt) /funds
# #
Increase/ (decrease) in cash in the period 3,601,142 (267,476)
Cash inflow/ (outflow) from Movement in debt 2,645,647 (2,577,362)
Change in net funds resulting from cash flows 6,245,511 (2,844,838)
Currency translation adjustment 92,805 251,548
Net debt at 1 August 2004/ 1 February 2003 (4,237,032) (1,643,742)
Net funds/ (debt) at 31 January 2005/ 31 July
2004 2,102,562 (4,237,032)
NOTES TO THE ACCOUNTS
For the period ended 31 January 2005
1. The results for the period are all derived from continuing operations.
2. The unaudited results have been prepared on the basis of the accounting
policies adopted in the annual accounts for the 18 month period ended 31
July 2004.
3. The interim report for the 6 months to 31 January 2005 was approved by
the Directors on the 15 April 2005.
4. The calculation of basic earnings per share is based on the weighted
average shares in issue throughout the 6 month period. The diluted
earnings per share include employee share options.
5. The interim results are unaudited and do not constitute statutory
financial statements as defined in section 240 of the Companies Act
1985.
6. At the time of the placing and admission to AIM the shareholders of
Europa Oil & Gas Limited exchanged their entire shareholding for
39,999,998 ordinary shares in Europa Oil & Gas (Holdings) plc. Merger
accounting has been adopted in respect of this transaction.
Accordingly, the interim accounts have been prepared as if Europa Oil &
Gas (Holdings) plc had been in existence throughout the period.
The comparative figures for the prior 18 month period are based on those
consolidated figures published for Europa Oil & Gas Limited. The profit and loss
account for the current 6 month period reflects the result of Europa Oil & Gas
(Holdings) plc from the date of its incorporation on 31 August 2004 and those of
its subsidiaries for the 6 month period to 31 January 2005.
This information is provided by RNS
The company news service from the London Stock Exchange
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