2008 Preliminary Results

11th Jun 2009 07:00



Immediate Release

11 June 2009

MAPLE ENERGY PLC 

("MAPLE" OR THE "COMPANY")

Preliminary Results

for the year ended 31 December 2008

Maple Energy plc (AIM: MPLE, LIMA: MPLE), an integrated independent energy company with assets and operations in Peru, today announces its preliminary financial results for the year ended 31 December 2008.

Financial Highlights

Operational Highlights

Oil production averaged 499 barrels per day ("bpd") during December 2008, an increase of 7% as compared to December 2007. The Pacaya oilfield in Block 31-E, reactivated in March 2008, contributed 100 bpd of this production.

Sales from the Pucallpa Refinery in 2008 totaled 838,040 barrels of refined products, an average of 2,296 bpd.

Maple commenced drilling operations in its 22-well development programme with the drilling and completion of two development wells in the Maquia oilfield in the fourth quarter of 2008.

Acquisition of 225 kilometers of 2-D seismic data to identify the optimal drilling site for the Cashiboya Deep prospect in Block 31-E and also to provide additional geological information on the Santa Rosa prospect was completed in October 2008. 

Maple Rig 1, a 2,000 horsepower heli-transportable diesel-electric drilling rig, was substantially completed and assembled in December 2008. 

Maple continued developing and producing seed cane for the Ethanol Project at its La Huaca seed cane farm. 

Maple cleared approximately 3,000 hectares of its planned 10,600 hectare sugar cane plantation for the Ethanol Project.

In December 2008, Maple substantially completed construction of a temporary water pump station to deliver water from the Chira River to its planned 400-hectare secondary seed cane farm located on the main estate of the Ethanol Project.

Other Ethanol Project highlights

In April 2008, Maple received approval of the environmental and social impact assessment for the Ethanol Project from the Peruvian government.

In August 2008, Maple obtained a key permit from the Peruvian government for the construction of the main water conveyance system for the sugar cane plantation.

During the last seven months of 2008, Maple entered into five important supply agreements to provide all of the major equipment and integration engineering services for the Ethanol Plant which is anticipated to process up to 5,000 tonnes per day of sugar cane at full operation and will include a distillery with a capacity to produce up to approximately 35 million gallons of fuel-grade ethanol per year and a power generation plant with a capacity to produce up to 37 MW of electric power. 

Maple entered into an investment agreement with the Peruvian government allowing Maple early recovery of a substantial portion of the value-added taxes incurred in the Ethanol Project.

Jack W. Hanks, Chairman of Maple, commented today:

"I am pleased to be able to present another set of robust results from Maple Energy showing increased revenue and real progress in all areas of our operations. However, 2009 promises to be a pivotal year for the company as we focus on three key operational areas. We are on the cusp of company-changing results with our drilling campaigns on Block 31-E and on the Maquia and Agua Caliente oil fields, and we intend to make significant progress on our Ethanol Project. I look forward to reporting back to shareholders on progress throughout the year." 

For further information, please contact

Maple Energy plc (+ 51 1 611 4000) 

Jack W. Hanks, Chairman of the Board and Executive Director

Rex W. Canon, Chief Executive Officer, President and Executive Director

Jefferies International Limited (+44 20 7029 8000)

Jack Pryde 

Paul Wheeler

Mirabaud Securities Ltd (+44 20 7321 2508) 

Peter Krens

Rory Scott

Citigate Dewe Rogerson (+44 20 7638 9571)

Martin Jackson

George Cazenove

Earnings Call 

Maple will hold a conference call on 11 June 2009 at 4.00 pm BST (10.00 a.m. Peruvian time) for analysts, shareholders, and prospective investors. The call can be accessed by dialling 0808 109 0700 (within the UK) or +44 (0) 20 3003 2666 (International including Peru). Call participants will be asked for their full name, company details, and pass code. The pass code for this call is 8292103. 

This call will include statements from Rex W. Canon, Chief Executive Officer, and Ray Cochard, Chief Financial Officer. Upon completion of the remarks by Mr. Canon and Mr. Cochard, a question and answer session will be held whereby conference call participants will be permitted to interact with management.

2008 Operating Results 

For the year ended 31 December 2008, Maple increased its revenues to US$95.3 million, or 18%, compared with US$80.7 million for the year ended 31 December 2007. Maple also improved its gross profit per barrel of hydrocarbon sold to US$25.77 for 2008 as compared with US$23.98 for 2007. The Company's gross profit for the year ended 31 December 2008 was US$21.6 million compared with US$21.5 million for the year ended 31 December 2007.

Maple suffered a net loss after taxes of US$7.1 million in 2008, or US$0.079 per share, as compared to a net loss after taxes of US$2.0 million in 2007, or US$0.034 per share. This loss was mostly the result of higher administrative expenses of US$3.9 million, a loss on the Aguaytia investment compared to a US$1.2 million profit in 2007 and the recognition of a non-cash impairment charge to goodwill due to the lower oil price at the end of the year of US$3.4 million. In 2007 Maple recognised US$3.5 million of listing costs. The impairment charge to goodwill was expensed in the 2008 Income Statement in compliance with IAS 36 "Impairment of Assets". Adjusted EBITDA, a key performance indicator for measuring Maple's underlying financial operating efficiency, declined to US$3.0 million in 2008 as compared with US$8.8 million in 2007.

The information set forth below reflects Maple's (i) consolidated financial data for the year ended 31 December 2008; (ii) consolidated financial data for the year ended 31 December 2007, and (iii) other financial and operating data. The financial information included herein is based on International Financial Reporting Standards ("IFRS") as adopted for use in the European Union.

 

 

Key Performance Indicators
	2008	2007
Refinery sales volume, barrels	838,040	896,075
Gross profit per barrel sold	US$25.77	US$23.98
	US$'000	US$'000
	Consolidated	Consolidated
Revenue from operations	95,290	80,717
Gross profit	21,600	21,487
Operating loss	(5,330)	(970)
Share of (loss)/profit of an associate	(73)	1,171
Loss for the year	(7,078)	(1,990)
Adjusted EBITDA (1)	2,991	8,832

(1) Adjusted Earnings Before Interest Taxation Depreciation and Amortisation ("Adjusted EBITDA") is calculated as operating loss before exceptional items and exploration expenses plus depreciation, amortisation and workers' profit sharing, but including share of (loss)/profit of an associate. Please see a reconciliation of operating loss to Adjusted EBITDA elsewhere herein.

Cash and cash equivalents were US$8.5 million at 31 December 2008 as compared to US$34.3 million at 31 December 2007. The lower cash and cash equivalents balance was primarily the result of capital expenditures relating to the acquisition of Maple Rig 1, acquisition of 2-D seismic data and the Ethanol Project.

Maple's share of the results of Aguaytia Energy, LLC ("Aguaytia Energy") materially impacts Maple's financial and operating results. This impact was increasingly significant in 2008 as Maple acquired an additional 3.1% economic interest in Aguaytia Energy in 2007. For 2008, Maple recognised a loss of US$0.073 million from its ownership in Aguaytia Energy as compared with a profit of US$1.17 million in 2007. The loss from Aguaytia Energy was primarily the result of a decline in net revenues related to Aguaytia's electric power business and significant royalty obligations paid to the Peruvian government in connection with the production of natural gas and natural gas liquids. These exceptionally high royalty payments were largely due to record-level international hydrocarbon prices that began to decline in the second half of 2008. On 10 June 2009, the Company completed the sale of its interests in Aguaytia Energy in order to monetise this asset (the "Aguaytia Sale") and focus on the Company's exploration, oilfield development and ethanol initiatives. As a result of the Aguaytia Sale in 2009, this factor will not have a material impact on the Group's financial performance in future periods.

Cost of sales associated with Maple's operations primarily consist of natural gasoline purchased from Aguaytia Energy, royalties and refinery costs. Certain of these costs are fixed, whereas others are variable. The most significant factor increasing Maple's cost of sales is the cost of the natural gasoline purchased from Aguaytia Energy due to higher commodity prices during the majority of 2008 in comparison with the previous year. During 2008, the cost per barrel of natural gasoline amounted to US$65.30 as compared to US$50.69 during 2007. Another significant factor affecting Maple's cost of sales is the royalties paid to the Peruvian government by Maple for its production from its producing fields. During 2008, Maple's total royalty payments increased to US$6.9 million as compared to US$5.5 million in 2007.

Administrative expenses increased to US$17.8 million in 2008 as compared to US$13.9 million in 2007. The increase in administrative expenses of US$3.9 million was primarily due to increases in labor costs of US$2.0 million, auditing and consulting fees of US$1.2 million and deferred workers profit participation of US$0.6 million.  Labor costs increased due to hiring additional employees and the impact of the decline of the dollar exchange rate on payroll costs in Peruvian soles. 

Maple's administrative and operating personnel headcount increased in 2008 to support increased exploration and production activities and the Ethanol Project. Total average headcount during the year was 457 as compared to 373 during 2007.

Set forth below is a reconciliation of operating loss to adjusted EBITDA:

	2008	2007
	US$'000	US$'000
Operating loss	(5,330)	(970)
Impairment of goodwill	3,444	-
Depreciation	1,324	979
Amortisation	2,799	2,977
Workers' profit sharing	560	271
Listing costs	-	3,515
Exploration expense	267	479
Share of (loss)/profit of an associate	(73)	1,171
Expensing of Maple brand	-	410
	______	______
Adjusted EBITDA	2,991	8,832
	=======	=======

 

 

Finance revenue increased from US$0.9 million in 2007 to US$1.1 million for 2008 as a result of increased interest payments due to higher cash balances in 2008 as compared with 2007. 

Outlook for 2009

Maple believes 2009 will prove to be a transformational year for the Company as its planned activities could result in significant developments in each of its core areas of operations. The Company will specifically focus its efforts on the following key operational initiatives for 2009:

Significantly progressing the Ethanol Project's agricultural and industrial requirements through production of seed cane from the Ethanol Project's sugarcane plantation, the construction of the main water conveyance system, the delivery of major components of the Ethanol Plant, and the commencement of on-site construction of the Ethanol Plant, and Advancing the Company's 22-well development drilling programme in the Maquia and Agua Caliente oil fields. 

Each of these planned activities and associated results could potentially have a material positive impact on the Company's results of operations and future prospects.

The timing and completion of our 2009 operations and activities are subject to a number of factors, including availability of capital, drilling results, availability of services and equipment, and governmental approvals. Based on these and other factors, we may increase or decrease our planned activities or prioritise certain projects over others during 2009.

The Company's capital program, including execution of the key initiatives outlined above, are expected to be funded through the Company's available cash, debt, and equity financings related to the Ethanol Project. 

Forward-Looking Statements

Except for the historical information contained in this annual report, statements contained in this document, particularly those regarding possible, projected or assumed future performance and results, including growth outlook, forecasted economics, operations, production, contracting, costs, prices, earnings, returns and potential growth, are or may include forward-looking statements. Such statements relate to future events and expectations and as such involve known and unknown risks and uncertainties. These risks and uncertainties include, among other things, market conditions, the price of oil and natural gas, weather risks, economic and political risks and other factors discussed in Maple Energy's Admission Document available on the Company's website (www.maple-energy.com). Forward-looking statements are not guarantees of future performance or an assurance that Maple Energy's current assumptions and projections are valid. Actual results, actions and developments may differ materially from those expressed or implied by those forward-looking statements depending on a variety of factors. Furthermore, any forward-looking statements presented are expressed in good faith and are believed to have a reasonable basis as of the date of this annual report. These forward-looking statements speak only as at the date of this annual report, and Maple Energy plc does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2008 

		2008 US$'000	2007 US$'000
Revenue		95,290	80,717
Cost of sales		(73,690)	(59,230)
		___________	___________
Gross profit		21,600	21,487
		___________	___________
Administrative expenses		(17,796)	(13,935)
Selling and distribution costs		(5,423)	(4,528)
Exceptional listing costs		-	(3,515)
Goodwill impairment		(3,444)	-
Exploration expense		(267)	(479)
		___________	___________
Total operating expenses		(26,930)	(22,457)
		___________	___________
Operating loss		(5,330)	(970)
Finance revenue		1,069	930
Finance costs		(907)	(2,125)
Share of (loss)/profit of an associate		(73)	1,171
		___________	___________
Loss before tax		(5,241)	(994)
Income tax expense		(1,837)	(996)
		___________	___________
Loss for the year		(7,078)	(1,990)
		==========	==========
Loss attributable to:
Equity holders of the parent		(6,799)	(2,152)
Minority interests		(279)	162
		____________	____________
		(7,078)	(1,990)
		==========	==========
Basic and Diluted loss per share attributable to ordinary equity holders of the parent	US$ (cent)	(7.90)	(3.38)
		=========	=========

  CONSOLIDATED BALANCE SHEET

as at 31 December 2008

ASSETS	2008 US$'000	2007 US$'000
Non-current assets
Property, plant and equipment	52,143	8,647
Other intangible assets	51,399	47,837
Exploration and evaluation assets	6,305	-
Investment in an associate	30,170	30,243
	_________________	____________
	140,017	86,727
	_________________	____________
Current assets
Income tax recoverable	2,122	451
Prepayments and other assets	5,004	5,415
Inventories	11,436	10,805
Trade and other receivables	4,086	7,055
Cash and cash equivalents	8,543	34,342
Restricted cash	3,403	3,403
	_________________	____________
	34,594	61,471
	_________________	____________
TOTAL ASSETS	174,611	148,198
	===========	========
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Issued capital	892	812
Share premium	91,036	67,417
Other reserves	3,113	2,801
Merger reserve	42,647	42,647
Retained loss	(14,747)	(7,948)
	_________________	____________
	122,941	105,729
Minority interests	9,736	8,168
	_________________	____________
Total equity	132,677	113,897
	_________________	_____________
Non-current liabilities
Long-term debt	3,158	2,854
Other non-current liabilities	546	944
Provisions	1,053	1,020
Deferred income tax liability	10,966	9,445
Deferred workers' profit sharing liability	4,062	3,503
	_________________	_____________
	19,785	17,766
	_________________	_____________
Current liabilities
Current portion of long-term debt	3,901	1,953
Trade and other payables	7,588	7,416
Bank loans	3,400	1,100
Other current liabilities	7,260	6,066
	_________________	_____________
	22,149	16,535
	_________________	_____________
TOTAL LIABILITIES	41,934	34,301
	__________	_______
TOTAL EQUITY AND LIABILITIES	174,611	148,198
	==========	=======

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2008

	Attributable to equity holders of the parent
	____________________________________________________________________________________________________
	Number of Ordinary Shares	Issued capital US$'000	Share premium US$'000	Other reserves US$'000	Merger reserve US$'000	Retained loss US$'000	Total US$'000	Minority interests US$'000		Total equity US$'000
At 1 January 2007	48,581,130	486	17,882	2,952	42,647	(5,796)	58,171	-		58,171
Loss for the year	-	-	-	-	-	(2,152)	(2,152)	162		(1,990)
	_________	_________	_________	_______	_______	_________	_______	_______		_______
Total income and expense for the year	-	-	-	-	-	(2,152)	(2,152)	162		(1,990)
Issue of share capital	32,632,477	326	55,190	(6,100)	-	-	49,416	6,100		55,516
Transaction costs on issue of share capital	-	-	(5,655)	-	-	-	(5,655)	-		(5,655)
Issue of share capital to minority interests	-	-	-	2,711	-	-	2,711	7,200		9,911
Transaction costs on issue of share capital  to minority interests	-	-	-	-	-	-	-	(434)		(434)
Deemed disposal by minority interest of its  minority interests	-	-	-	4,642	-	-	4,642	(4,642)		-
Share-based payment	-	-	-	369	-	-	369	-		369
Payments made by a subsidiary to shareholders of the Company	-	-	-	(1,773)	-	-	(1,773)	(218)		(1,991)
	_________	_________	_________	_______	_______	_________	_______	_______		_______
At 31 December 2007	81,213,607	812	67,417	2,801	42,647	(7,948)	105,729	8,168		113,897
Loss for the year	-	-	-	-	-	(6,799)	(6,799)	(279)		(7,078)
	_________	_________	_________	_______	_______	_________	_______	_______		_______
Total income and expense for the year	-	-	-	-	-	(6,799)	(6,799)	(279)		(7,078)
Issue of share capital	7,967,061	80	24,937	-	-	-	25,017	-		25,017
Issue of share capital to minority interests	-	-	-	-	-	-	-	1,847		1,847
Transaction costs on issue of share capital	-	-	(1,389)	-	-	-	(1,389)	-		(1,389)
Share-based payment	-	-	-	313	-	-	313	-		313
Share options exercised	36,386	-	71	-	-	-	71	-		71
Payments made by a subsidiary to  shareholders of the Company	-	-	-	(1)	-	-	(1)	-		(1)
	_________	_________	_________	_______	_______	_________	_______	_______		_______
At 31 December 2008	89,217,054	892	91,036	3,113	42,647	(14,747)	122,941	9,736		132,677
	===========	==========	============	=========	=========	==========	=========	=========		=========

 

 

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 December 2008

	2008 US$'000	2007 US$'000
Operating activities
Collection from customers	98,259	74,861
Payments to suppliers and third parties	(77,314)	(70,572)
Payments to employees	(14,745)	(11,691)
Income tax paid	(1,987)	(3,196)
Interest paid	(1,129)	(2,104)
	_______	_______
Net cash provided by/(used in) operating activities	3,084	(12,702)
	_______	_______
Investing activities
Investment in associate	(2,371)	(2,607)
Increase in restricted cash	-	(3,203)
Decrease in restricted cash	-	438
Purchase of property, plant and equipment	(41,480)	(2,391)
Additions of exploration and other intangible assets	(16,110)	(1,545)
Increase of amounts due from shareholders	(1)	(873)
Dividends received	-	1,520
Interest received	1,069	930
	_______	_______
Net cash used in investing activities	(58,893)	(7,731)
	_______	_______
Financing activities
Proceeds from issue of share capital	26,864	65,427
Proceeds from share options exercised	71	-
Transaction costs	(1,389)	(5,655)
Payments of long-term debt	(2,200)	(4,061)
Proceeds from long-term debt	4,452	-
Payments of bank loans	(14,090)	(2,729)
Proceeds from bank loans	16,390	-
	_______	_______
Net cash provided by financing activities	30,098	52,982
	_______	_______
Net (decrease) increase in cash and cash equivalents during the year	(25,711)	32,549
Net foreign exchange difference	(88)	130
Cash and cash equivalents at beginning of year	34,342	1,663
	_______	______
Cash and cash equivalents at end of year	8,543	34,342
	======	======
Transaction that did not affect cash flows:
Advances made to supplier during 2007 transferred to Property, Plant and Equipment	3,388	-
	======	======

1. BASIS OF PREPARATION

The financial information presented in this report has been prepared in accordance with the Group's accounting policies under International Financial Reporting Standards ("IFRS"), as adopted for us in the European Union, and on a basis consistent with the prior year published financial statements.

2. CORPORATE INFORMATION 

 

Maple Energy plc ("the Company") was incorporated in the Republic of Ireland on 18 October 2006. On 12 February 2007, the Company re-registered as a public limited company. The Company is domiciled in the Republic of Ireland.  Prior to 30 November 2006, the group of companies (the "Maple Group"), which now form the consolidated financial statements of Maple Energy plc and its subsidiaries (collectively, "Maple" or the "Group"), was organised as two separate groups of companies under common control: The Maple Companies, Limited ("TMC") and The Maple Gas Corporation del Perú Ltd ("Maple BVI"), both companies registered in the British Virgin Islands. Effective 30 November 2006, a series of transactions were undertaken whereby these entities were re-organised such that TMC acquired Maple BVI and its related entities. TMC also acquired various minority interests. This business combination was accounted for using the purchase method of accounting.

On 7 February 2007, the Company entered into a share exchange agreement (the "Share Exchange Agreement") with the shareholders of TMC, whereby in return for the issuance of 48,581,113 Ordinary Shares of US$0.01 each, the Company acquired 1,619,371 shares of US$0.01 each of TMC, representing its entire issued shared capital at that time, and became the ultimate holding company of the Maple Group. This group re-organisation was accounted for using the pooling of interests method. The purpose of this re-organisation was to implement a more efficient group structure to facilitate the raising of capital on the Alternative Investment Market ("AIM") of the London Stock Exchange. 

On 13 July 2007, the Company completed the placing of 26,700,000 Ordinary Shares of US$0.01 each at a price of STG£0.84 each, and its then entire issued share capital, consisting of 75,281,130 Ordinary Shares of US$0.01 each, were admitted to trading on AIM. 

The transaction costs associated with listing the Company's existing shares on AIM, in the aggregate amount of US$3,515,000, were, in accordance with IAS 32 Financial Instruments: presentation ("IAS 32"), expensed to the income statement for the year ended 31 December 2007. Transaction costs, including broker fees and commissions, incurred in connection with the issuance of new shares amounting to US$5,655,000 were applied against share premium.

Effective 20 December 2007, the Ordinary Shares of the Company were admitted to trading on the Lima Stock Exchange. 

On 21 May 2008, the Company completed the placing of 7,967,061 Ordinary Shares of US$0.01 each at a price of STG£1.60 per share for aggregate gross proceeds of US$25,017,000. Transactions costs incurred in connection with the placing amounted to US$1,389,000, and were applied against share premium.

3. GOING CONCERN

The current economic conditions create uncertainty over the availability of additional equity and debt financing and the general demand and market price for the Group's products. The Group has prepared forecasts and cash flow projections in specific detail which extend to 30 September 2010. These forecasts and projections take account of potential changes in both the timing and extent of cash flows and funding, and in particular, funding for the Ethanol Project. 

The Group cash flow projections anticipate required capital expenditures (excluding value-added taxes) for the Ethanol Project of approximately US$180 million in the period from 1 January 2009 up to 30 September 2010. The Group currently estimates that funding for the Ethanol Project will come through 40% equity and 60% long-term project debt financing. The Group is in advanced negotiations with third party financing parties for the Ethanol Project. To date the directors have not received any indications that suggest that required financing for the Ethanol Project will not be available on acceptable terms. The Group has also examined certain alternatives should the necessary financing not be available on acceptable terms. The directors are of the opinion that these alternatives are reasonably practicable should funding for the Ethanol Project not be secured.

 

The cash flow projections are dependent on the Group achieving its forecast EBITDA as set out in the Group's profit forecast. While these profit assumptions are dependent on a number of factors outside of the Group's control, including the price of oil and natural gasoline, the directors are of the opinion that the Group's profit forecasts reflect the Group's best estimate of its results from operations based on current market conditions and other factors known to the directors at the date of approval of the financial statements. 

After making enquiries, the directors have a reasonable expectation that the Group and the Company have adequate financial resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and the financial statements.

4. BUSINESS COMBINATIONS

Share Exchange Agreement

On 7 February 2007, the Company entered into a share exchange agreement with the shareholders of TMC, whereby in return for the issuance of 48,581,113 Ordinary Shares of US$0.01 each, the Company acquired 1,619,371 shares of TMC of US$0.01 each, representing its entire issued share capital, and became the ultimate holding company of the Maple Group. This share exchange has been accounted for using the pooling of interests method. The shares issued by the Company were valued at US$18,368,000. The difference between the share capital of the Company and the share capital of TMC on entering into the share exchange agreement in the amount of US$42,647,000 has been reflected as a merger reserve, and has been accounted for retrospectively at 1 January 2006. 

 

5. SEGMENT INFORMATION

The Group's primary format for segment reporting is business segments and the secondary format is geographical segments. The risks and returns of the Group's operations are primarily determined by the nature of the different activities that the Group engages in, rather than the geographical location of these operations. This is reflected by the Group's organisational structure and the Group's internal financial reporting systems.

The Group has two reportable operating segments: Exploration, Production and Marketing, and the Ethanol Project. In the prior year, the Group had three reportable segments whereby Exploration was separate from the Production and Marketing segment. Following an internal re-organisation in the current year, these segments were combined as it reflected the Group's revised organisation structure and internal financial reporting systems. The comparative figures have been restated to reflect this change. Exploration, production and marketing activities include oil exploration, field development and production, as well as refining of crude oil and natural gasoline, and hydrocarbons manufacturing and marketing. The Ethanol Project relates to the development of an agricultural industrial project for the future production and sale of ethanol and related products. Segment revenue, segment expense and segment results include transfers between business segments. These transactions and any unrealised profits and losses are eliminated on consolidation. 

The Group's geographical segments are based in Peru. Sales to external customers disclosed in geographical segments are based on the geographical location of its customers.

  

Primary reporting format - Business segments

	Exploration, production and marketing	Ethanol	Other and corporate	Adjustments and eliminations	Total  Group
	US$'000	US$'000	US$'000	US$'000	US$'000
Year ended 31 December 2008
Revenue
Sales to external customers	95,290	-	-	-	95,290
	____________	__________	__________	___________	_______
Results
Operating income/(loss)	(2,056)	(120)	(3,154)	-	(5,330)
Finance revenue	404	437	233	(5)	1,069
Finance costs	(890)	-	(22)	5	(907)
Share of loss in associate	-	-	(73)	-	(73)
	____________	__________	__________	___________	________
				-
Profit/(loss) before tax	(2,542)	317	(3,016)	-	(5,241)
	____________	__________	__________	___________
Income tax expense					(1,837)
					________
Loss for the year					(7,078)
					________
Assets and liabilities
Segment assets	96,653	34,528	52,110	(51,503)	131,788
Goodwill	12,653	-	-	-	12,653
Investment in associate	-	-	30,170	-	30,170
	____________	__________	__________	___________	________
	109,306	34,528	82,280	(51,503)	174,611
	____________	__________	__________	___________	________
Segment liabilities	64,269	28,261	994	(51,590)	41,934
	____________	__________	__________	___________	________
Other information
Capital expenditure
Intangible assets	6,409	9,701	-	-	16,110
Property, plant and equipment	27,530	17,338	-	-	44,868
	____________	__________	__________	___________	________
	33,939	27,039	-	-	60,978
	____________	__________	__________	___________	________
Depreciation	1,324	-	-	-	1,324
Amortisation	2,799	-	-	-	2,799
Goodwill impairment	3,444	-	-	-	3,444
	____________	__________	__________	___________	________
Other non-cash expenses
Share-based payments	-	-	313	-	313
	____________	__________	__________	___________	________

  

	Restated Exploration, production and marketing	Ethanol	Other and corporate	Adjustments and eliminations	Total  Group
	US$'000	US$'000	US$'000	US$'000	US$'000
Year ended 31 December 2007
Revenue
Sales to external customers	80,957	-	-	(240)	80,717
	____________	__________	__________	____________	________
Results
Operating income/(loss)	5,208	(391)	(5,787)	-	(970)
Finance revenue	192	28	725	(15)	930
Finance costs	(2,025)	-	(115)	15	(2,125)
Share of profit in associate	-	-	1,171	-	1,171
	____________	__________	__________	____________	________
Profit/(loss) before tax	3,375	(363)	(4,006)	-	(994)
	____________	__________	__________	____________
Income tax expense					(996)
					________
Loss for the year					(1,990)
					________
Assets and liabilities
Segment assets	72,945	6,236	31,359	(8,682)	101,858
Goodwill	16,097	-	-	-	16,097
Investment in associate	-	-	30,243	-	30,243
	____________	__________	__________	____________	__________
	89,042	6,236	61,602	(8,682)	148,198
	____________	__________	__________	____________	__________
Segment liabilities	39,185	314	3,572	(8,770)	34,301
	____________	__________	__________	____________	__________
Other information
Capital expenditure
Intangible assets	28	1,517	-	-	1,545
Property, plant and equipment	1,987	734	-	-	2,721
	____________	__________	__________	____________	__________
	2,015	2,251	-	-	4,266
	____________	__________	__________	____________	__________
Depreciation	974	5	-	-	979
Amortisation	2,977	-	-	-	2,977
	____________	__________	__________	____________	__________
Other non-cash expenses
Share-based payments	-	-	369	-	369
	____________	__________	__________	____________	__________

Secondary reporting format - Geographical segments

All the Group's sales and capital expenditures are in Peru.

Total assets

Total assets are allocated based on where the assets are located:

	2008	2007
	US$'000	US$'000
Peru	174,486	147,712
British Virgin Islands	110	483
Ireland	15	3
	________	_________
	174,611	148,198
	=======	=======

 

6. INCOME TAX AND WORKERS' PROFIT SHARING

(a)  Income tax and workers' profit sharing regulations

The Company is subject to Irish tax regulations. Subsidiaries incorporated in the British Virgin Islands are not subject to income tax and workers' profit sharing. Peruvian subsidiaries of the Company are subject to the Peruvian Tax System and Peruvian labour regulations. According to Peruvian regulations, companies operating in the refining sector that have more than 20 employees must pay to their employees profit sharing equivalent to 10 percent of taxable income. 

Corporation tax in Ireland is 12.5% on trading activities and 25% on non-trading activities. Exploitation activities of hydrocarbons in Blocks 31-B and 31-D are subject to the common Peruvian tax regulations in force as of 30 March 1994 (30%). Exploration activities in Block 31-E are subject to the common Peruvian tax regulations in force as at 6 March 2001 (22%). Refining and commercial activities of hydrocarbons are subject to the current Peruvian tax regime (30%). 

(b) Income tax and workers' profit sharing expense

	2008	2007
	US$'000	US$'000
Income tax
- Current	317	2,711
- Deferred	1,520	(1,715)
	___________	___________
	1,837	996
	==========	==========
Workers' profit sharing (presented as part of administrative expenses)
- Current	-	541
- Deferred	560	(270)
	___________	___________
	560	271
	==========	==========

(c) Movement of the deferred income tax and workers' profit sharing

	At 1 January 2007	Workers´ profit sharing	Income  tax	At 31 December 2007	Workers´ profit sharing	Income  tax	At 31  December  2008
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Deferred asset
Other	98	(9)	(43)	46	3	5	54
	_______	_______	_______	_______	_______	_______	_______
Deferred asset	98	(9)	(43)	46	3	5	54
	_______	_______	_______	_______	_______	_______	_______
Deferred liability
Exploration and development costs	(358)	(5)	9	(354)	(668)	(1,804)	(2,826)
Contractual rights and customer relationships	(13,090)	294	1,668	(11,128)	273	734	(10,121)
Oil wells	(1,478)	32	184	(1,262)	30	80	(1,152)
Inventories	(105)	26	79	-	-	-	-
Workovers	-	(68)	(182)	(250)	(181)	(487)	(918)
Others	-	-	-	-	(17)	(48)	(65)
	_______	_______	_______	_______	_______	_______	_______
Deferred liability	(15,031)	279	1,758	(12,994)	(563)	(1,525)	(15,082)
	_______	_______	_______	_______	_______	_______	_______
Deferred liability, net	(14,933)	270	1,715	(12,948)	(560)	(1,520)	(15,028)
	========	=========	=========	========	=========	=========	========

At 31 December 2008 and 2007, there was no recognised deferred tax liability for taxes that would be payable on the unremitted earnings of certain of the Group's subsidiaries as:

As of 31 December 2008, there are no temporary differences associated with investments in subsidiaries for which deferred tax liability has not been recognised (2007: US$8,678,000).

 

The tax effect of the temporary differences associated with exploration costs and tax loss carry forward for which deferred tax assets have not been recognised aggregate to US$2,396,000 and US$1,393,000, respectively and expire in 2012. The deferred tax asset is not recognised due to uncertainty surrounding the existence of sufficient deductible profits when the timing differences release.

 

(d)  Reconciliation between income tax expense and the loss before tax multiplied by the standard tax rate

	2008	2007
	US$'000	US$'000
Loss before income tax	(5,241)	(994)
Legal consolidated rate	30%	30%
	_______	_______
At consolidated rate	(1,572)	(298)
Losses of entities not subject to tax	810	1,771
Impairment loss	1,033	-
Unutilised taxable losses carried forward	1,130	-
Taxes assumed by the Group	304	186
Other permanent items	132	333
Effect of change in tax rate due to change of legal status of Group entities	-	(996)
	_______	_______
Effective income tax expense	1,837	996
	======	======

7. LOSS PER SHARE 

Basic loss per share amounts are calculated by dividing net loss for the year attributable to equity holders of the parent by the weighted average number of Ordinary Shares outstanding during the year. Diluted loss per share amounts are calculated by dividing the net loss for the year attributable to ordinary equity holders of the parent by the weighted average number of Ordinary Shares outstanding during the year plus the weighted average number of Ordinary Shares that would be issued on the conversion of all the dilutive potential Ordinary Shares into Ordinary Shares.

The following reflects the income and share data used in the basic and diluted loss per share computations:

	2008	2007
Numerator	US$'000	US$'000
Net loss attributable to equity  holders of the parent for basic and diluted earnings	(6,799)	(2,152)
	____________	____________
	2008	2007
Denominator	Number	Number
Weighted average number of ordinary shares for  basic and diluted earnings per share	86,110,857	63,657,928
	____________	____________
	US dollar (cent)	US dollar (cent)
Basic and diluted loss per share	(7.90)	(3.38)
	===========	============

The calculation of basic and diluted loss per share for 2007 has been adjusted retrospectively to reflect the application of the pooling of interests method of accounting for the share exchange agreement whereby the Company acquired the entire issued share capital of the former group parent, The Maple Companies, Limited. For all periods until 7 February 2007, the number of shares in issue is deemed to be the shares of The Maple Companies, Limited adjusted by a multiple of 30, the multiple applied by the Company to acquire The Maple Companies, Limited. After 7 February 2007, the actual number of shares in issue is taken into account. 

The Company has instruments in issue that could potentially dilute basic earnings per share in the future, but are not included in the calculation for the reasons outlined below:

 

No ordinary share transactions or potential ordinary share transactions occurred after the balance sheet date but before the financial statements were authorised for issue that would have changed significantly the number of ordinary shares or potential ordinary shares outstanding at the end of the period if those transactions had occurred before the end of the reporting period.

 

8. INVESTMENT IN AN ASSOCIATE

Aguaytía Energy, LLC ("Aguaytía") was incorporated as a Delaware limited liability company on 30 October 1995 with a share capital divided into cash and non-cash units. Aguaytía has an issued and outstanding share capital of 181,838 units, comprised of 161,838 cash units and 20,000 non-cash units. Whilst both the cash and the non-cash units are entitled to voting rights, an adjustment is made to distributions paid by Aguaytía such that the distributions allotted to shareholders of cash units is greater than the distributions allotted to shareholders of non-cash units. 

Through its wholly owned subsidiaries, Aguaytía carries out the following activities within Peru:

 

Movement in the investment for the years ended 31 December 2008 and 31 December 2007:

 

	2008	2007
	US$'000	US$'000
1 January	30,243	25,614
Acquisition of additional interest	-	4,978
Share of (loss)/ profit for the year:
Negative goodwill arising on acquisition of additional interest	-	203
Share of (loss)/ profit of associate	(166)	999
Elimination of Group's share of unrealised profit on transactions with associate	93	(31)
Dividends received	-	(1,520)
	________	______
31 December	30,170	30,243
	=======	======

On 18 December 2007, the Company exercised its right of first refusal to acquire from a third party investor in Aguaytía an additional 5,684.5 cash units. The consideration of US$4,978,000 was satisfied by the payment of US$2,607,000, and a promissory note in the amount of US$2,371,000 due and paid in June 2008. Negative goodwill of US$203,000, representing the difference between the consideration and the fair value of the associate's assets and liabilities multiplied by the additional interest acquired was credited to the Group's income statement for 2007.

As of 31 December 2008 and 2007, the Company held 23,104 cash units and 20,000 non-cash units, which represented a voting interest of 23.7% and an economic interest of approximately 17.6%. 

The following table sets forth the summarised financial information of the Group's investment in Aguaytía at 31 December 2008 and 31 December 2007, and for the years then ended:

	2008	2007
	US$'000	US$'000
Share of the associate's balance sheet
Current assets	9,351	8,428
Non-current assets	31,808	34,415
Current liabilities	(3,811)	(3,251)
Non-current liabilities	(7,178)	(9,349)
	______	______
Net assets	30,170	30,243
	========	========
Share of the associate's revenue and profit
Revenue	22,776	16,397
(Loss)/profit for the year	(166)	999

9. COMMITMENTS AND CONTINGENCIES

(a) Income Tax

The tax authorities are legally entitled to review and, if necessary, adjust the income tax calculated by Peruvian subsidiaries of the Group during the four years subsequent to the year of the related tax return filing. The income tax and value added tax returns of the following years are pending review by the tax authorities:

Entity	Open years
Maple Production del Perú S.R.L.	2004 - 2008
The Maple Gas Corporation del Perú S.R.L.	2004 - 2008
Acer Comercial S.R.L.	2004 - 2008
Maple Etanol S.R.L.	2004 - 2008

Due to various possible interpretations of current legislation, it is not possible to determine whether or not future reviews will result in tax liabilities for the Group. In the event that additional taxes payable, interest and surcharges result from tax authority reviews, they will be charged to expense in the period assessed and paid. However, other than as discussed below, in management's opinion, any additional tax assessment would not be significant to the consolidated financial information as at 31 December 2008. 

The 2001 income tax return of Maple Gas was reviewed by the Tax Administration, and on 9 December 2003, Maple Gas received assessments related to a supposed omission on an income tax payment of US$2,222,729, including interest as at 27 November 2003. On 7 January 2004, Maple Gas filed a tax claim against those assessments. Resolution of the matter is pending at 31 December 2008. Arising on the acquisition of Maple BVI, the Group recognised an amount of US$809,000 in connection with the fair value of this contingency.

(b) Ethanol Project

On 5 January 2007, the Group signed a contract with the Peruvian government to acquire untilled lands for the cultivation of sugarcane and to develop an industrial project for producing automotive ethanol. The Group acquired 10,676 hectares of land for a total amount of US$641,000 and made the following commitments: 

 

The Group entered into an investment agreement with the Government of Peru thereby allowing early recovery of a substantial portion of the value-added taxes incurred in connection with the Ethanol Project's project costs. As part of this agreement, the Group has committed to invest, within 48 months from October 2008, a minimum of US$141 million for, among other things, the development of the main water delivery system, sugarcane plantation and facilities related to the processing of the harvested sugarcane.

(c) Environmental matters

The Group is subject to the Code for the Environment and Natural Resources. Such code requires companies to prepare an Environmental Impact Assessment ("EIA") approved by a competent authority. In connection with such Code and its rulings, the Group filed the corresponding EIAs for Blocks 31-B and 31-D, which were duly approved in 1996 and 2003, respectively. In April 2008, the Group received approval of the EIA for Block 31-E. In the same month, the Group received approval of the EIA for the Ethanol Project from the Peruvian Government.

In addition, according to the relevant license contracts and to the refinery and sales plant lease contract mentioned below, the Group is not responsible for environmental damages caused before the beginning of its operations. As at 31 December 2008 and 31 December 2007, management believes that the Group is in compliance with the current environmental regulations and therefore, no provisions are required with respect to environmental matters.

 

(d) Operating lease of refinery and sales plant and administrative facilities

The Group entered into an operating lease agreement for the refinery and sales plant in Pucallpa and the associated buildings and equipment. The Refinery and Sales Plant leases expire beyond 2014, although such term may be extendable by the parties on similar terms and conditions provided that Maple Gas is not in breach of any terms of the lease, and the License for the Exploitation of Hydrocarbons in Blocks 31-B and 31-D, and the License for the Exploitation of Hydrocarbons in Block 31-C remain in force. In addition, the Group has entered into operating leases for its administrative facilities in Lima and in Northern Peru; these leases expire in various periods until 2014.

The minimum future lease payments are as follows:

	2008			2007
Minimum future lease payments	Offices lease	Refinery and  sales plant	Total	Office  lease	Refinery and  sales plant	Total
payable within:	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
1 year	536	584	1,120	481	584	1,065
2 to 5 years	1,905	2,335	4,240	1,731	2,335	4,066
Thereafter	494	6,033	6,527	883	6,616	7,499
	________	________	________	________	________	________
Total	2,935	8,952	11,887	3,095	9,535	12,630
	========	========	========	========	========	=======

(e) Decommissioning of oil production facilities

At the end of the term of the license contracts, the Group is required to deliver to the Peruvian State, without any cost and charge, and in good condition, all the wells, camps, pipelines, constructions and other facilities located in the area of the license contracts. Accordingly, no obligation exists for the decommissioning of production facilities at the end of the license period, except for the plugging of wells with no reserves at that date. 

(f) Legal claims

  Payment claimed by Energy Services S.A.

In 2000, the Group was defendant in an action initiated by Energy Services S.A. for US$248,832 (principal of US$170,148 plus accrued interest of US$78,684 until 15 May 2000), related to the acquisition and installation of a pipeline among others. In the same year, the Group filed a counter-claim against Energy Services S.A. requesting the payment of approximately US$265,000, plus legal interest, which has been reduced to US$223,000, plus legal interest, as of 31 December 2008.

On 11 April 2006, the Seventh Civil Room of Lima ruled in favour of Energy Services S.A. and ordered the Group to pay US$170,148 plus interest calculated at an annual rate of 18%. On 23 May 2006, the Superior Court accepted the appeal of the Group to the above decision. However, due to the favourable sentence obtained by Energy Services S.A., on 23 June 2006, the Superior Court ordered the restriction of the Group to its funds deposited in Banco de Crédito de Peru by US$200,000. These funds are presented as restricted funds. 

On 6 November 2006, the Fourth Civil Room of the Superior Court of Lima declared null the sentence of the Seventh Civil Room dated 11 April 2006, on the basis that there had been a violation of the Group's right to due process, and ordered the judge to issue a new sentence, taking into consideration the arguments of the Group. 

On 27 October 2007, the Civil Room ruled in favour of Energy Services S.A. and confirmed the sentence of 11 April 2006. On 29 November 2007, the Group lodged an Appeal against the sentence of the Seventh Civil Room of Lima before the Fourth Civil Room of the Superior Court of Lima. 

On 5 August 2008 the Fourth Civil Room of the Superior Court of Lima issued a ruling favorable to Maple Gas in part and to Energy Service S.A. in part. Maple Gas was ordered to pay US$170,148 plus legal interest to Energy Services S.A. while the latter was ordered to pay to Maple Gas US$105,384 plus legal interest.

On 17 September 2008 Maple Gas and Energy Services del Peru S.A.C.(a related party of Energy Services S.A.) signed a private commitment in which Maple Gas has to invite Energy Services to become a supplier of services for the exploration works in the Peruvian jungle. In addition, Energy Services del Peru S.A.C. is committed to pay to Maple Gas any amount that could be determined by the court as an obliged payment in relation to the litigation between Maple Gas and Energy Services S.A. This amount may not exceed US$250,000 and would be payable during the time that Energy Services S.A.C. provides its service.

On 18 December 2008 Energy Services S.A filed an appeal before the Supreme Court against the ruling of the Fourth Civil Room of the Superior Court issued on 5 August 2008.

Based on the opinion of the Group's legal advisors, management considers remote the possibility that the Supreme Court will revise the ruling issued by the Fourth Civil Room of the Superior Court. The amounts due by the Group to Energy Services S.A. have been fully provided in the consolidated financial statements.

 

Other contingencies

The Group is involved in other claims of a diverse nature. Management believes that any possible loss which may result

from these claims will not have a materially adverse effect on the Group's financial position or reported results.

(g) Capital commitments

Purchasing of natural gasoline from Aguaytía 

The Group has a commitment to acquire at a price derived from market prices the natural gasoline produced by Aguaytía over the life of Aguaytía´s Block 31-C license contract.

Supply of equipment for the Ethanol Project

In June 2008, Maple entered into a contract with Praj Industries Limited ("Praj") of Bavdhan, India, to supply the fermentation, distillation, and dehydration equipment for Maple's ethanol plant. Pursuant to the terms of the contract, Maple will pay a total of approximately US$10 million for the fabrication and supply of equipment with a capacity to produce approximately 400,000 liters per day of fuel-grade ethanol. As of 31 December 2008, an amount of US$3,636,000 has been included in assets under construction in property, plant and equipment.

Maple also entered into a contract with Siemens AG, to supply the turbogeneration equipment. Pursuant to the terms of the contract, Maple will pay approximately US$8 million for the fabrication and supply of a steam turbine, generator, and related equipment which is expected to produce 37 megawatts of electricity. As of 31 December 2008, an amount of US$3,150,000 has been included in assets under construction in property, plant and equipment.

Acquisition of Sugar Cane Handling and Extraction Equipment for the Ethanol Project

In September 2008, Maple entered into a contract with Uni-Systems, Inc. ("Uni-Systems"), an international supplier of equipment and advanced process technology to the sugar, alcohol, and power industries, to supply the sugar cane reception, handling, and preparation equipment; the sugar juice extraction equipment; and the juice treatment equipment for Maple's ethanol plant (the "Ethanol Plant"). Pursuant to the terms of the contract, Maple will pay approximately US$13 million for the fabrication and supply of this equipment enabling the Ethanol Plant to process up to 5,000 tons of sugar cane per day. As of 31 December 2008, an amount of US$1,832,000 has been included in assets under construction in property, plant and equipment.

Acquisition of Steam Generation Equipment for the Ethanol Project

In September 2008, Maple also entered into a contract with Uni-Systems and Allsoft Engenharia e Informatica Industrial (also known as Mitre), a Brazilian engineering and fabrication company specialising in boiler and steam generation equipment, to supply the boiler and steam generation equipment for the Ethanol Plant. Pursuant to the terms of the contract, Maple will pay approximately US$12 million for the fabrication and supply of the boiler and steam generation equipment. This equipment will be used to supply steam to the steam turbine that will form part of the electric power generation facilities of the Ethanol Plant as well as supply process steam to the Ethanol Plant. As of 31 December 2008, an amount of US$3,285,000 has been included in assets under construction in property, plant and equipment.

As of 31 December 2008 the outstanding commitments in relation to these contracts are:

 

 

The amount approved by the directors, including the amounts contracted above, in respect of total capital expenditure for the Ethanol Project is approximately US$222 million, excluding VAT, at 31 December 2008. At 31 December 2008, the amount approved by the directors in respect of future capital expenditures for the exploration, production and marketing segment is approximately US$18 million.

 

10. STATUTORY ACCOUNTS

The financial information presented in this report does not represent full statutory accounts. Full statutory accounts for the year ended 31 December 2008 prepared in accordance with IFRS upon which the Auditors have given an unqualified audit report, have not yet been filed with the Registrar of Companies. Full accounts for the year ended 31 December 2007, prepared in accordance with IFRS and containing an unqualified audit report, have been delivered to the Registrar of Companies.

11. SUBSEQUENT EVENTS

Medium-Term Credit Facility

On 19 January 2009, Maple entered into a US$10 million, five-year secured credit facility with Banco de Crédito del Perú ("BCP") and Maple drew down the full available amount of US$10 million on 23 January 2009. The credit facility is denominated in Peruvian currency (Nuevos Soles) at a fixed rate of 11.75%. Maple converted the Peruvian currency credit facility into a US dollar fixed interest rate credit facility by means of a cross currency swap contract with BCP that closed on 23 January 2009, thereby reducing the interest to a fixed rate of 8.56%. Certain covenants are required as part of this loan agreement.

The borrowings from this facility are being used (i) to finance a portion of Maple's capital costs in developing its producing oilfields, (ii) to repay up to US$2.6 million of outstanding indebtedness and (iii) for general corporate purposes.

Main Water Conveyance System Agreement

On 11 February 2009, Maple completed a contract with Consorcio Bajo Chira to construct the main water conveyance system for the Ethanol Project's sugarcane plantation. Consorcio Bajo Chira is a consortium of Peruvian companies, Haug S.A. and Corporacion de Ingenieria Civil S.A.C. Maple will pay approximately US$17 million for the engineering and certain procurement and construction services for the water conveyance system, which will include: the construction of two main pumping stations on the Chira River; the construction of two water reservoirs with approximate combined storage of 700,000 cubic meters; the installation of an approximate 40 kilometer water pipeline system; and the construction of two re-lift pump stations located at the two water reservoirs.

Agreement for Ethanol Project Drip Irrigation System

On 24 February 2009, Maple executed an agreement with Netafim Peru, S.A.C. ("Netafim"), for the engineering, procurement and construction of a drip irrigation system relating to the Company's Ethanol Project. Under the terms of the agreement, Maple will pay Netafim approximately US$22 million for the engineering, procurement and construction of a drip irrigation system, which includes pumps, filters, and piping. The system will transport irrigation water from the project's main water delivery system to the sugarcane in the field, and includes some of the latest designs in drip irrigation technology. Furthermore, this system should allow Maple to minimise the amount of water necessary to irrigate its planned 8,000 hectare sugarcane estate. 

Drilling Rig Sale-Leaseback Financing Transaction

On 13 March 2009, Maple completed a US$18.9 million sale-leaseback financing facility with Banco Internacional del Perú ("Interbank"), one of the largest commercial banks in Peru. Maple intends to use the lease financing facility to refinance the Maple Rig 1, which it acquired for approximately US$16 million plus value-added taxes. The Maple Rig 1 is expected to be used for drilling Maple's Santa Rosa and Cashiboya Deep prospects in Block 31-E. Upon completion of the transaction, Interbank acquired and immediately leased the Maple Rig 1 back to Maple. Under the terms of the lease financing facility, Interbank agreed to finance the cost of the Maple Rig 1 at an effective annual interest rate of approximately 13%.

Sale of Interest In Aguaytia Energy and Entry Into Participation Agreement

On 10 June 2009, Maple's partially-owned subsidiary, MGDC, successfully completed the sale of all of its interests in Aguaytia Energy to an affiliate of Duke for US$28 million. Maple received approximately US$21.6 million, in cash, as consideration for its pro-rata beneficial interest in Aguaytia Energy held through MGDC. The minority shareholder of MGDC will receive the remaining US$6.4 million of consideration paid in connection with the Aguaytia Sale. Under the terms of the purchase and sale agreement governing the Aguaytia Sale, MGDC will also retain certain rights to contingent payments not to exceed an additional US$7.0 million in consideration and retain certain liabilities which are not expected to be material, which are also subject to Maple's pro rata interest in Aguaytia Energy held through MGDC.

Maple also entered into a Participation Agreement with an affiliate of Duke in relation to the Aguaytia Deep Interest. The Participation Agreement enables Maple to maintain a 33.77% beneficial interest in the rights to the hydrocarbons that are discovered or produced from the Aguaytia Deep Interest, while assuming responsibility for 33.77% of the costs associated with the exploration and exploitation of these prospective rights.

12. APPROVAL OF PRELIMINARY ANNOUNCEMENT

The board approved the preliminary announcement on 10 June 2009.

ENDFR DDGDLCDBGGCG

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Related Shares:

MPLE.L