RNS Number:5640E
Plectrum Petroleum PLC
27 September 2007
PLECTRUM PETOLEUM Plc
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2007
EXECUTIVE CHAIRMAN'S REVIEW
I am pleased to present the unaudited interim results for Plectrum Petroleum for
the six months ended June 2007
Since its incorporation in February 2005, Plectrum has successfully implemented
a strategy of growing an attractive portfolio of exploration assets which were
acquired with low cost of entry, cover large geographic areas and have high
levels of working interest. These attractive exploration assets, which have
either been overlooked or under-explored, will benefit from the application of
new and emerging exploration technologies.
HIGHLIGHTS
In the six month period, Plectrum
* received approval from Peru's government-owned oil company Perupetro SA
(Perupetro) for an Exploration and Exploitation Contract covering Block
Z-34, Offshore Peru, in conjunction with its Aim-listed joint venture
partner Gold Oil Plc.
* was awarded in the 24th Seaward Licensing Round a "Promote" licence
covering UK Blocks 214/19 and 214/20, located west of the Shetland Islands.
Plectrum has a 100% operated interest in the licence.
* acquired the remaining 10 per cent. of REAP Tunisia GmbH ('REAP Tunisia')
that it did not already own.
* reported mean prospective resources of twelve prospects totaling 201
million barrels of oil with a combined Expected Monetary Value ("EMV") of
US$249 million (independently estimated by TRACS International).
* successfully acquired 3,178 km of 2D marine seismic reflection data over
the Nabeul permit offshore Tunisia, ahead of schedule and within budget on
23rd June 2007.
Emphasis has been placed on consolidating our position in our operational areas
and we have also secured the award of two new oil and gas assets in Peru and the
UK.
Plectrum has successfully completed its seismic programme in Tunisia and is
ready to commence seismic data acquisition programmes in Australia and Peru.
These programmes, together with any future development in Tunisia, will require
additional funding and capital investment.
During the period expenditure on oil and gas assets totaled #1,536,007, mainly
in Tunisia. Cash at the end of the period was #4,723,971 of which #650,000 was
held as security for a guarantee issued to Perupetro SA in respect of the
company's minimum work obligations under the Z-34 Licence..
OPERATIONAL REVIEW
* Tunisia: REAP Tunisia GmbH, a wholly owned subsidiary of Plectrum
Petroleum Plc, successfully acquired 3,178 km of 2D seismic survey over the
Nabeul Prospection Permit and the field data is currently being processed by
Fugro Seismic Imaging Ltd in England. The Company has fulfilled the work
obligations made to the Ministere de l'Industrie de l'Energie et des PME for the
Nabeul Prospection Permit and informed the authorities on 9 July of its
intention to convert the Prospection Permit into an Exploration Permit on the 24
January 2008, in accordance with Article 9 of the "Protocol D'Accord".
* Peru: On 15th March the Company was awarded a 50% working interest in
offshore Block Z-34. The first two (of three) rounds of consultation workshops
have been held with indigenous communities adjacent to Block Z-34 as part of the
environmental impact assessment for the planned 2008 seismic programme to
acquire 2,500 km of 2D data.
* UK: On the 1st April 2007 Plectrum was awarded Seaward Licence P1503
covering Blocks 214/19 and 214/20. The Company has been conducting detailed and
regional geological assessments of the prospectivity in and around the licence
area.
* Australia: On the 17th April the Department of Industry and Resource
of the Western Australian Government agreed to suspend the condition requiring
the completion of the seismic programme until 8th Feb 2008. The Company has
tendered the seismic contract to acquire 3,300 km of 2D seismic in the Bremer
sub-basin.
RESULTS
The Group incurred a loss for the period of #422,339 (30 June 2006: loss of
#427,151 restated)
PROSPECTS
Given the high level of projected activity, the Board has been looking into a
number of ways of accessing the required funding including:
- raising further equity capital via a placing of shares with new and
existing shareholders;
- farming out of interests in current projects; and
- considering corporate amalgamations.
On 7th September 2007 your Board announced that they had reached agreement with
The Board of Cairn Energy Plc (Cairn) on the terms of a recommended cash offer
to be made by Jefferies International on behalf of Capricorn Oil and Gas
Limited, a subsidiary of Cairn, for the whole of the issued share capital of
Plectrum.
Under the terms of the Offer, Plectrum Shareholders will be entitled to receive
13 pence per Plectrum Share in cash. On this basis, the terms of the Offer value
the entire existing issued share capital of Plectrum at approximately #23.4
million.
Prior to the approach from Cairn, no other satisfactory opportunity had been
identified. It is against this background that the initial approach by, and
subsequent offer from, Cairn has been considered by the Board. Your Board has
concluded, and has been so advised by its financial advisors Blue Oar Securities
Plc, that the Offer is in the best interests of the Company and its shareholders
and, if declared wholly unconditional and completed successfully, it will ensure
that the Company has access to adequate funds to further develop its current
projects whilst securing a certain return for shareholders.
SUMMARY
Over the past 8 months, we have made significant progress in establishing
Plectrum Petroleum in the E&P sector. We have strengthened the portfolio and
taken our first operational steps in Tunisia. I believe we have delivered on our
strategy and the exploration value creation that the company has achieved since
incorporation is evinced by the Cairn offer.
M Whyatt
Chairman of the Board
26th September 2007
For further information, please contact:
Mike Whyatt, Executive Chairman +44 (0) 1330 826 710
Jim Bain, Finance Director +44 (0) 1330 826 710
John Wakefield, Blue Oar Securities Plc +44 (0) 117 933 0020
Group Income Statement
For the six months to 30 June 2007
Unaudited Unaudited Restated
6 months 6 months Year to 31
to 30 June to 30 June December
2007 2006 2006
#'000 #'000 #'000
Revenue - - -
Administrative expenses (514) (544) (1,265)
Operating loss (514) (544) (1,265)
Interest receivable 142 119 276
Loss on ordinary activities before taxation (372) (425) (989)
Minority interest - (2) -
Loss for the period/year (372) (427) (989)
Basic loss per share 1p 1p 1p
Diluted loss per share 1p 1p 1p
Group statement of total recognised income and expenses
Unaudited 6 months
to 30 June 2007
#'000
Loss for the period (372)
Total recognised loss (372)
Group Balance Sheet
As at 30 June 2007
Note Unaudited Unaudited Restated
6 months 6 months Year to 31
to 30 June 2007 to 30 June 2006 December 2006
#'000 #'000 #'000
Non current assets
Goodwill 6,025 5,950 5,950
Exploration and evaluation assets 2,302 - 766
Property, plant and equipment 8 4 9
8,335 5,954 6,725
Current assets
Trade and other receivables 30 33 25
Cash and cash equivalents 4,724 7,386 6,055
4,754 7,419 6,080
Total assets 13,089 13,373 12,805
Current liabilities
Trade and other payables (803) (253) (149)
Total liabilities (803) (253) (149)
Net assets 12,286 13,120 12,656
Equity
Called up share capital 1 8,431 8,431 8,431
Share premium account 6,473 6,473 6,473
Profit and loss account (2,618) (1,680) (2,246)
Equity attributable to equity holders 12,286 13,124 12,658
Minority interest - (4) (2)
Total equity 12,286 13,120 12,656
Group cash flow statement
Note Unaudited Unaudited Year
6 months 6 months to 31
to 30 June 2007 to 30 June 2006 December 2006
#'000 #'000 #'000
Net cash from/(used in) operating
activities 3 137 (294) (1,110)
Investing activities
Interest received 142 119 276
Purchases of property, plant & equipment (2) (1) (7)
Purchases of exploration and evaluation
assets (1,536) - (516)
Acquisition of subsidiary 4 (72) - (250)
Net cash used in investing activities (1,468) 118 (497)
Financing activities
Net proceeds on issue of shares - 2,365 2,465
Net cash from financing activities - 2,365 2,465
Net(decrease)/ increase in cash & cash
equivalents (1,331) 2,189 858
Cash & cash equivalents at beginning of
period 6,055 5,197 5,197
Cash & cash equivalents at end of period 4,724 7,386 6,055
Included in cash and cash equivalents at 30 June 2007 is an amount of #650,000
held in a set off account against a guarantee issued to PeruPetro SA in
connection with the company's obligations under the minimum work programme
entered into in respect of Block Z-34, offshore Peru.
Notes to the interim financial statements
Period ended 30 June 2007
1. Share capital
No #
Authorised
Ordinary shares of 5 pence each 435,300,000 21,765,000
Issued
Ordinary shares of 5 pence each 180,372,499 9,018,625
Issued and fully paid
Ordinary shares of 5 pence each 168,626,707 8,431,335
Issued, not called or paid
Ordinary shares of 5 pence each 11,745,792 587,290
Directors' share issues under the Company Share Scheme
On 27 September 2005 M Whyatt subscribed for 4,239,131, M Evans subscribed for
3,913,041, and J Bain subscribed for 1,956,523 ordinary 5p shares at an issue
price of 11.5p under the Company's share award scheme. These shares have been
issued nil paid by the Company and the Company has not called the amount due on
these shares. Under the scheme the shares will vest and the amount due on them
will be called in full on the third anniversary of the issue date. The number
of shares which will vest depends on the estimated monetary value of the Group's
hydrocarbon assets at that date. If the expected value of hydrocarbon assets is
$50 million or over then 25% of the subscribed shares will vest, if the value is
$100 million or over then 50% will vest, if the value is $150 million or over
then 75% will vest and if the value is $200 million or over then 100% will vest.
As the receipt of the proceeds from these shares is uncertain and contingent
on the fulfilment of a number of conditions including the expected monetary
value of the Group's hydrocarbon assets, no receivable or charge has been
recognised in the interim financial statements at 30 June 2007.
2. Basis of preparation of financial statements
The interim statement does not represent statutory accounts within the meaning
of Section 240 of the Companies Act 1985.
For all periods up to and including the year ended 31 December 2006, Plectrum
prepared its financial statements in accordance with UK Generally Accepted
Accounting Practice (UK GAAP). The full accounts for the year ended 31 December
2006, which received an unqualified report from the auditors, had been filed
with the Registrar of Companies. From 1 January 2007 Plectrum is required to
prepare consolidated financial statements in accordance with International
Financial Reporting Standards (IFRS); as a consequence Plectrum has assumed a
transition date of 1 January 2006 which will be the initial date of IFRS
restatement.
Financial information for the interim results of 2007 has also been prepared on
the basis of IFRS. The general principle that should be applied on first-time
adoption of IFRS is that standards in force at the first reporting date (for
Plectrum that is 31 December 2007) should be applied retrospectively.
However, IFRS 1 - 'First time Adoption of International Financial Reporting
Standards' contains a number of exemptions which companies are permitted to
apply. Plectrum has elected:
* Not to restate its financial information for acquisitions, disposals
and restructuring occurring before 1 January 2007.
* To deem cumulative translation differences to be zero at 1 January
2006.
The six months information for 2007, the restated financial information for the
year ended 31 December 2006 and the interim results of 2006 have been prepared
on the basis of all International Accounting Standards (IAS) currently
applicable, International Financial Reporting standards (IFRS) and Standing
Interpretations Committee (SIC) and International Financial Reporting
Interpretations Committee (IFRIC) interpretations issued by the International
Accounting Standards Board (IASB) expected to be in effect for the year ending
31 December 2007. It is possible that there will be changes to these standards
and interpretations before the end of 2007, which might require further
adjustments to this information before it is included in the 2007 Annual Report
and Accounts.
From 1 January 2007, under IFRS, all financial assets and financial liabilities
have to be recognised initially at fair value. In subsequent periods the
measurement of these financial instruments depends on their classification into
one of the following measurement categories:
i) Financial assets or financial liabilities at fair value
through income statement (such as those used for trading purposes and all
derivatives which do not qualify for hedge accounting);
ii) Loans and receivables;
iii) Available-for-sale financial assets (including certain
investments held for the long term); and
iv) Other liabilities.
Plectrum has produced an 'IFRS Restatement' document setting out its accounting
policies under IFRS, and reconciliations of UK GAAP to IFRS for its 2007 interim
and full year Income and Cash Flow Statements and its Balance Sheets at 1
January 2006, 30 June 2006 and 31 December 2006. This information can be found
at www.plectrum.co.uk. These results are prepared in accordance with the
accounting policies contained in the IFRS Restatement document.
Earnings per share
The calculation of basic earnings per share is based on the loss after tax and
on the weighted average number of ordinary shares in issue during the period.
The diluted earnings per share allows for the full exercise of outstanding share
purchase options and adjusted earnings.
3. Notes to the cash flow statement
Unaudited Unaudited Restated
6 months 6 months Year to 31
to 30 June to 30 June December
2007 2007 2006
Operating loss from continuing operations (514) (544) (1,265)
Adjustments for:
Depreciation of property, plant & equipment 2 1 2
Operating cash flows before movements in
working capital (512) (543) (1,263)
(Increase)/Decrease in receivables (5) 54 63
Increase in payables 654 195 90
Net cash from/(used in) operating activities 137 (294) (1,110)
4. Acquisition of subsidiary
In February 2007, the company acquired the whole of the issued share capital of
Banchory Exploration Limited for a cash consideration of #72,000, thereby
increasing its holding in the issued share capital of Plectrum Oil Limited to
100%. Banchory Exploration Limited's sole asset is the minority 49.9% holding in
Plectrum Oil Limited. M Whyatt, M Evans and J Bain each hold 7,000 ordinary
shares (representing 10.7% of the issued share capital) in Banchory Exploration
Limited and each received #8,000.
In February 2007, the company acquired the remaining 10% of REAP Tunisia for a
nominal amount.
INDEPENDENT REVIEW REPORT TO PLECTRUM PETROLEUM PLC
We have been instructed by the company to review the financial information for
the six months ended 30 June 2007 which comprises the group income statement,
the group balance sheet, the group cash flow statement, the group statement of
total recognised income and expenses and related notes 1 to 4. We have read the
other information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
This report is made solely to the company, in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are also responsible for ensuring that the accounting policies and presentation
applied to the interim figures are consistent with those applied in preparing
the preceding annual accounts except where any changes, and the reasons for
them, are disclosed.
First-time adoption of International Financial Reporting Standards
As disclosed in note 2, the next annual financial statements of the group will
be prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. Accordingly, the interim report has been
prepared in accordance with the recognition and measurement criteria of IFRS and
the disclosure requirements of the Listing Rules that would be applicable if the
company were admitted to the Official List.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.
Deloitte & Touche LLP
Chartered Accountants
Aberdeen
United Kingdom
26th September 2006
Notes: A review does not provide assurance on the maintenance and integrity of
the website, including controls used to achieve this, and in particular on
whether any changes may have occurred to the financial information since first
published. These matters are the responsibility of the directors but no control
procedures can provide absolute assurance in this area.
Legislation in the United Kingdom governing the preparation and dissemination of
financial information differs from legislation in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
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