21st Jun 2007 07:00
Petroceltic International PLC21 June 2007 Petroceltic International plc Results for the year ended 31 December 2006 Petroceltic International plc ("Petroceltic" or the "Company") today announcesits preliminary results for the year ended 31 December 2006. HIGHLIGHTS Operational Algeria • Two successful gas discovery wells in Algeria.• Discovery reports submitted to Sonatrach for discovery delineation programmes.• Estimated unrisked in-place resource of 13 tcfe (gas equivalent), making it a world-class asset. Italy • Seismic and log data confirmed oil potential of Miglianico-Elsa play fairway. P50 resource potential 180 mmbls.• Civitaquana Licence proved as highly prospective - two hydrocarbon plays identified: shallow Tertiary gas play and a deeper oil play.• Nine new permits applications accepted, with seven on an exclusive basis. Tunisia • Seismic programmes in Tunisia identified further targets for future exploration drilling programme.• Unrisked P50 potential recoverable reserve estimated to be 312 million barrels of oil. Financial • Year end cash resources of $33 million; $40 million of new equity raised.• Royalty from gas sales from the Kinsale Head Gas field was $1.26 million (2005: $1 million). Corporate • Brian O'Cathain appointed as Chairman, adding strength and depth to the management team.• Operational and technical team expanded. Future Plans Algeria • Aggressive drilling campaign of up to five wells planned for 2008, following completion of seismic work.• 3D seismic to commence in Q3 2007.• Appraisal programme planned for the TXA-CLR Ridge, the ISAS-1 and HTT-2 discovery areas.• Exploration well planned for Southwest Isarene. Italy • Prospects identified for drilling of exploration wells on established Italian acreage, including a Miglianico oil field extension well and an Elsa 2 appraisal well.• New acreage to be evaluated and pre-drill activities to commence. Tunisia • Initial farm-in proposal received which, if approved, would substantially fund a forward program, of up to three wells, commencing in 2007. Brian O'Cathain, Executive Chairman, commented: "The outlook for Petroceltic is excellent and activities in 2006 confirmed thequality and prospectivity of the Company's diverse asset base. Petroceltic hasgot the team and the financing in place to continue its growth, and an excitingyear lies ahead." John Craven, Chief Executive, commented: "2006 was an extremely active year operationally, in which a number ofoperational, technical and financial milestones were reached. Petroceltic hasestablished a strong platform for future growth and the Company continues totarget new business opportunities and joint ventures in our areas of focus tofurther increase shareholder value." Press queries to: John Craven/Brian O'CathainPetroceltic International plcTel: +353 (1) 495 9285 James Henderson/Alisdair HaythornthwaitePelham PRTel: +44 20 7743 6676 Ronnie SimpsonSimpson FT PRTel: +353 (01) 260 5300 Notes to Editors: The relevant information has been reviewed and verified by Mr. John Craven,Director and Chief Executive Officer of Petroceltic, for the purposes of theGuidance Note for Mining, Oil and Gas Companies issued by the London StockExchange in March 2006. Mr. Craven holds a B.Sc in Geology and a Masters Degreein Petroleum Geology from Imperial College of Science and Technology in London,and is a member of the Petroleum Exploration Society of Great Britain. Glossary of Terms bblsd Barrel (1 barrel = 159 litres) per daybcf Billion cubic feet (1 cubic foot = 0.028 m3)boe Barrels of oil equivalentsbopd Barrels of oil per daymmbo Million barrels of oilmmscf Million standard cubic feet per daytcf Trillion cubic feettcfe Trillion cubic feet equivalentsLNG Liquified natural gasPSC Production sharing contract CHAIRMAN'S STATEMENT I am pleased to report an excellent year of operational progress in 2006,establishing the foundations for long term growth over the coming years. Ouroperational activity and portfolio development during the year have taken uscloser to our goal of establishing Petroceltic as a significant independent oiland gas company in our areas of focus. Particularly pleasing was the drilling, as operator, of two successful wells inAlgeria, which confirmed the presence of significant quantities of hydrocarbonson our asset there. We also progressed seismic programmes in Algeria, Italy andTunisia, allowing us to identify the optimal drilling locations for upcomingexploration and appraisal drilling programmes in those regions. The company is focused on two prolific petroleum provinces, North Africa andItaly, both of which have the potential to add significant discoveries andreserves. In North Africa, over 66 discoveries were made during 2006,representing the discovery of over one billion barrels of oil equivalent. NorthAfrican exploration drilling had a success rate of 40% in 2006, one of the bestin the world. In Italy, the dominant player, ENI, estimates that over 1.8billion barrels of oil equivalent remains to be discovered, in a country withfavourable tax terms and ready access to infrastructure and markets. Clearlyboth of these areas have huge potential for significant new discoveries anddevelopments, and ultimately, value creation. Petroceltic is focused onmaximising the value of the assets we already hold in these areas, on making newadditions to our portfolio of opportunities within our focus areas, and onutilising our strong industry relationships in the regions. In 2006, oil and gas prices rose to all time highs, providing strong incentivesfor new exploration and development. At the time of writing oil prices continueto remain high with no apparent sign of retreating, driven by global uncertaintyover geopolitical unrest in Nigeria and Iraq. These high prices have led to aboom in industry activity which in turns leads to increasing scarcity ofresources, be it exploration rigs, technical expertise, or investment capital.Equipment shortages lead to cost pressures on exploration and developmentcompanies. We are therefore pleased to have made significant progress inbringing co-venturers into our main assets, to help with the acceleration ofinvestment in these assets. We hope to make some positive announcements in thisrespect in the near future. We consider that oil prices are likely to remain high for the remainder of thedecade, with both OPEC and non-OPEC supply growth failing to respond adequatelyto the last three or four years of high and rising commodity prices. This periodof increasing demand for new developments and new supplies of oil and gasprovides an opportunity for Petroceltic to deliver value from its acreageportfolio, particularly given the location of the Company's assets, close to keymarkets with the infrastructure in place. Stock market conditions have been and remain difficult for AIM quotedinternational oil and gas companies. However, Petroceltic's operational trackrecord was reflected in the company's share price performance. The year startedwell, with Petroceltic's share price performing strongly against the Ernst andYoung Oil and Gas Eye index, which comprises the top twenty AIM quoted oil andgas exploration and production stocks. The company was outperforming the indexby over 60% at its peak in May 2006. After May, the sector's performance becamemore volatile, as trading conditions for small-capitalisation international oiland gas stocks became more erratic. The company continued to outperform duringthe remainder of 2006, finishing the year at 32% ahead of the sector. On a threeyear basis, Petroceltic's performance since January 2004 was over 200% ahead ofthe sector at year end 2006, and has continued to perform well against thesector in 2007. With our international experience, attractive asset portfolio, strong balancesheet and good contacts within the industry and with other regional players,Petroceltic has the potential to become a significant player in North Africa andMediterranean exploration and production. Our proven ability to leverage ourcontacts and relationships, to negotiate agreements and entries into newcountries, and to manage the technical and political risks will enable us tocontinue to develop our portfolio. The company has a strong management team withhigh levels of skills and experience in the international oil and gas industry. We intend to complement our organic growth programme by pursuing acquisitionopportunities of both corporate and assets. High oil prices have led to aseller's market in the international oil industry, but for experienced technicaland financial teams such as Petroceltic's, with detailed technical knowledge,good regional contacts and strong advisors, the opportunity to create valuethrough acquisition still exists. The Board will look carefully at all assetsand opportunities in the portfolio, seeking always to maximise shareholder valueand the potential upside. As a new Chairman I have been impressed by the high calibre of staff atPetroceltic and given my background as a geologist and petroleum engineer I haveno doubt as to the quality of the asset base. I will, with the Chief Executive,seek to develop the management team further as we take the company onto newheights and challenges. On behalf of the Board of Directors, I would like to thank the company'sshareholders for their continued support over the past year. In particular, onbehalf of the Board and the company I would like to thank the retiring Chairman,Brian Cusack, for his able stewardship of the company over the past ten years. In summary, the outlook for the company is bright. The combination of a highquality asset base and a strong team to exploit and develop that base means thatfurther growth can be expected over the coming years. I am confident of thefuture potential of Petroceltic, and I look forward to an exciting year ofactivity and further development ahead. Brian O'Cathain Executive Chairman 20 June 2007 CHIEF EXECUTIVE'S REVIEW 2006 was an active year for Petroceltic in which considerable operational,technical and financial milestones were achieved, giving Petroceltic a solidplatform for future growth and capital appreciation. ALGERIA Isarene PSC (Blocks 228/229A) Petroceltic 75% Highlights • Completed initial technical evaluation of the PSC area to assess the hydrocarbon resource potential and high-grade prospects for drilling. • Tendered and secured a drilling rig. • Drilled and tested two successful gas wells "ISAS-1" and "Hassi Tab Tab 2 (HTT-2)". • Submitted discovery reports and appraisal programmes for these wells to Sonatrach, the Algerian state oil company. • Tendered for 3D seismic acquisition. The petroleum basins of Algeria are considered to be world-class containing some35 billion boe of proven hydrocarbon reserves (Source: Wood MacKenzie). Algeriaalso supplies approximately 10% of Europe's natural gas via existing pipelinesto Italy and Spain and to LNG projects. This supply capacity is set to expandwith further gas pipelines, namely "Medgaz" to Spain and "Galsi" to Italy, bothof which are currently under development. Against this background Algeria hasthe potential to present significant opportunities in the coming years forPetroceltic, not only within our existing Isarene PSC, but also for additionalnew ventures within the country. 2006 / 07 Activity An extensive technical evaluation of the Isarene contract area outlined threeprospective areas, the Fertile Crescent in the northwest, the TXA-CLR ridge inthe eastern part of the block and an anticline structure in southwest Isarene.Petroceltic estimates that collectively these three areas have unrisked in-placeresource potential of 13 tcfe (gas equivalent). On completion of the technicalwork, a strategy has been devised to further evaluate these areas by drillingand by new seismic acquisition (and/or seismic reprocessing), covering all thenecessary requirements to progress towards commercialisation of potentialhydrocarbon resources in a timely manner. The Fertile Crescent This area contains five successful exploration wells, four gas wells and one oilwell, drilled by previous operators. In addition, this area has a relativelydense grid of 2D seismic data, some of which was reprocessed by Petrocelticduring early 2006. This reprocessing indicated that the pre-existing wells inthe area had been drilled on structures which were of low relief but are reallymore extensive than had previously been interpreted. Locations for our twodrilled wells, ISAS-1 and HTT-2, were selected on the basis of this newinterpretation. ISAS-1 The objective of this well was to evaluate the hydrocarbon potential ofreservoir objectives in the Carboniferous and the Ordovician and to confirm thepresence of gas in the Devonian F2 reservoir horizon from which gas and oil hadbeen flow-tested in nearby wells. ISAS-1 was spudded on 31 July 2006 and suspended as a gas discovery on 24September 2006. Approximately 1.1 mmscfd of gas was tested from the F2 andCarboniferous Visean B formations. In addition, log analysis indicated thepresence of gas in the Ordovician but only minor amounts were produced on testdue to low permeability in the reservoir. HTT-2 The objective of the HTT-2 well was to evaluate the hydrocarbon potential ofCarboniferous, Devonian F2 and Ordovician reservoir objectives. The well waslocated some 700 meters northwest of HTT-1 which was drilled in the 1960's by aprevious operator and had tested gas from the Ordovician and F2 reservoirs. Petroceltic's HTT-2 well spudded on 9 October 2006 and was suspended as a gasdiscovery on 13 December 2006. Combined gas flow rate of 15.3 mmscfd was testedfrom reservoirs in the Carboniferous and Devonian F2. (The F2 tested at 12.5mmscfd, the highest rate for this horizon in the Illizi Basin). The Ordovicianwas gas-bearing but gas did not flow when tested. The main conclusions from the drilling results of both wells were: • The shallow (less than 3,000 feet drilling depth) Carboniferous andDevonian F2 sandstones are prolific gas reservoirs throughout the FertileCrescent and can be easily correlated over a large area. • Considerable in-place gas resources are present in the Ordovicianreservoirs. Although gas has been tested at good rates from two existing wells(HTT-1 and INW-1), predicting where this sandstone reservoir has goodpermeability is one of the main challenges for future exploration. • The ISAS-1 well results together with the newly reprocessed 2D seismicdemonstrates that the ISAS-1 well is within the same structural closure aspreviously drilled wells GTT-1, TMZ-1, INE-1 and possibly INW-1, all of whichhave produced potentially commercial amounts of hydrocarbons on test.Furthermore the GTT-1 well which produced 400 bblsd oil on test is probablylocated on the oil rim of this structure. Thus the ISAS structure has foursuccessful wells that have tested hydrocarbons. • The HTT structure is now mapped to include three successful wells whichhave all tested gas. HTT-2 is located within the same structural closure aswells HTT-1 and HTTN both of which have flowed gas on test. (HTT-1 flowed circa19 mmscfd gas from the Ordovician). • The two structures on which both ISAS-1 and HTT-2 were drilled areestimated by Petroceltic to contain in-place gas resources of approximately 900bcf. A detailed appraisal programme is now planned over the discovery areas. Thefirst component of this programme will be the acquisition of 3D seismic datafollowed by further drilling on these structures and elsewhere in the FertileCrescent. The TXA-CLR Ridge This feature is the largest in the Isarene block. It is a north plunging ridgeextending some 70 kms from the south east to the northern part of the block.Unlike the Fertile Crescent there is only a relatively modest amount of existingseismic data over this feature. There is enough data to define the featurestructurally but not enough of sufficient quality to address some of the keyexploration issues such as reservoir quality in the Ordovician which is the mainobjective for this prospect. For this reason Petroceltic is planning to acquirenew 3D seismic data over the northern part of the ridge to high-grade areas ofgood reservoir quality before commencing a drilling programme. There are five existing wells drilled by previous operators either on or justoutside of the mapped structural closure on the ridge. However, these wellsappear to be gas bearing in the Ordovician which is the main reservoir target.There is also additional potential in the Devonian F2 and Carboniferousreservoirs. Petroceltic is the first company to have a Production Sharing Contract (PSC)over the whole of the Ridge area, and consequently, the opportunity to explorethis feature as a single entity. Petroceltic estimates prospective recoverablegas resources for the Ridge to be in excess of 2 tcf. Southwest Isarene A large north-westwards plunging anticline has been mapped using existing 2Dseismic data in the southwest part of the block. This seismic data is currentlybeing reprocessed in order to fully evaluate this Southwest Isarene area andoptimise a potential well location for this prospect. This is regarded as an oilprospect with the main reservoir objectives in the Devonian. Future Plans Petroceltic's immediate strategy is to focus on proving the large gas resourcepotential of the TXA-CLR Ridge to add to the 900 bcf in-place gas resources inthe HTT and ISAS structures in order to build a significant volume of gasreserves in the Isarene block for future potential development. At the same timewe will examine the feasibility of exploiting the oil resources in the GTT-1area in the northern part of the block. In this regard, an aggressive exploration and appraisal programme is planned inthe coming months for the TXA-CLR Ridge, the ISAS-1 and HTT-2 discovery areas,and the Southwest Isarene area. The initial work will focus on the acquisition of 3D seismic data over theTXA-CLR Ridge and the ISAS-1 and HTT-2 discoveries. At the same time,reprocessing of existing 2D seismic over the Southwest Isarene prospect andother parts of the contract area will continue. This data is necessary to forman accurate and reliable image of the subsurface for well optimisation. Commencing in 2008, and after the seismic work has been completed, it is plannedto have an aggressive drilling campaign of up to five wells in the block,targeting both the shallow Carboniferous/Devonian reservoirs and the deeperOrdovician. The Company is in the process of identifying a rig contractor tocarry out the drilling programme. ITALY Highlights • Offshore Block B.R268.RG - Interpretation of seismic data confirms potential of Miglianico- Elsa play fairway. - Onshore drilling feasibility study completed as initial step for planning drilling campaign. • Onshore Block Civitaquana - Data retrieval and initial evaluation progressing. • New applications - Nine new permit applications with low entry and maintenance costs, of which seven are on an exclusive basis. B.R268.RG (Petroceltic 40%) The main exploration potential on the B.R268.RG licence is concentrated in theLate Jurassic to Early Cretaceous, dolomitised basin floor fan play. Withrespect to this play, the currently identified resource potential on the licenceconsists of the possible extension of the onshore Miglianico field into theoffshore area and the offshore Elsa structure, which has been independentlyassessed by Petrel Robertson to contain a P50 potential recoverable oilresources of 182 mmbo. Secondary exploration potential exists in the Miocene torecent bio-genic gas play, which has been the source of over 85% of the gasproduced in Italy to date. The Miglianico field, which is operated by ENI, is due to come on stream in 2008at circa 4,000 bopd per well. We believe that the field contains approximately50 mmbo of reserves and that based on the available field maps, approximately20% of the Miglianico structure could be located in the B.R268.RG offshorelicence. During the year, around 300 kms of 2D seismic data was purchased from ENI acrossthe permit. In conjunction with our joint venture partner, Vega Oil, this datahas now been interpreted and confirms the presence of a large ENE-WSW trendingregional structure on the licence. In addition, a drilling feasibility study wascarried-out to assess the technical and commercial viability of drilling theoffshore prospects from an onshore location. At least two wells will be requiredto confirm the resource potential of the mapped prospects. These studies havepositioned the company well with respect to forward programme options for theproving-up of the substantial resource potential of this licence. Civitaquana Block (Petroceltic 40%) The Civitaquana Licence is also considered to be highly prospective. There aretwo hydrocarbon plays; a shallow Tertiary gas play and a deeper oil play. Retrieval of seismic and well data is progressing and we believe that earlyevaluation of the licence could facilitate opportunistic drilling of a shallowgas prospect if a suitable rig becomes available at short notice. The Ministry of Economic Development in Italy has approved the requiredEnvironmental Report and is expected to officially grant the exploration permit"Civitaquana" in the near future. New Licence Applications (Petroceltic 100%) In October 2006, Petroceltic applied for nine new permits in the centralAdriatic offshore area. Subsequently, in April 2007, seven permit applicationswere awarded on an exclusive basis to Petroceltic Elsa Srl, a wholly ownedsubsidiary of Petroceltic International plc, with Petroceltic as operator. Thesepermit areas, which cover approximately 2,040 sq kms, lie in water depthsranging from 30 to 150 meters. A decision on two further permit applications isexpected from the Ministerial Commission in the coming months. These exploration permit areas were primarily selected to access the extensionof the proven Late Jurassic-Early Cretaceous oil fairway, into the CentralAdriatic, to the east and southeast of the existing Petroceltic blocks. They areadjacent to four oil and gas fields, the Miglianico, Rospo Mare and Ombrino Mareoil fields and the Santo Stefano Mare gas field. TUNISIA Ksar Hadada PSC (Petroceltic 57%) Good progress has been made to enable further exploration and evaluation work tobe undertaken on the Ksar Hadada contract area. The main exploration target is the fractured Cambro-Ordovician quartzitereservoirs which host large producing oil and gas fields in neighbouring Libyaand Algeria. Secondary play potential exists in the Silurian Acacus Sandstonewhich has tested oil at rates in excess of 12,000 bopd from a recently drilledwell in Libya. Early in 2006 the Tunisian Government approved a farm-out from Petroceltic toIndependent Resources plc. As part of the farm-out terms Independent Resourcesplc acquired and processed a new seismic survey in the southern part of theblock. During the year technical evaluation has focused on the integration and mappingof all the new and existing seismic data in this southern area. This hasresulted in the firming up of four prospects (Oryx, South Salah, Sidi Toui A andSidi Toui B) with a combined unrisked P50 potential recoverable reserveestimated by the joint venture partners to be 312 mmbo. Subsequent to this work the company has received an initial farm-in proposalwhich, if approved, would substantially fund a forward programme of up to threewells, to evaluate this potential. IRELAND Kinsale Head Gas Royalty The Marathon operated Kinsale Head gas field complex which includes theSouthwest Kinsale and Ballycotton gas fields performed strongly in 2006. Gas isproduced in winter months to optimise gas price and reservoir management. Petroceltic's net royalty from gas sales was $1.26 million, the highest annualamount ever achieved by the Company. Donegal - Frontier Exploration Licence 1/05 (Petroceltic 16.25%) In August 2006, the obligation exploration well for the Licence, 13/ 12-1, wasdrilled by the operator Lundin Petroleum AB and was plugged and abandoned as adry hole. This Licence has now been relinquished. In summary, it has been an extremely active year for Petroceltic and itsoperational team and we are now well placed to progress the exploration andappraisal programmes in place across our diverse portfolio of assets. The Board of Petroceltic strongly believes that the real value drivers forjunior oil and gas companies lie in firstly acquiring interests in provenpetroleum basins and then adding value through seismic and drilling activityunder the stewardship of experienced industry professionals. I am pleased toreport that throughout 2006 and to date in 2007 we have made considerableprogress in all categories whilst at the same time have ensured that Petroceltichas adequate funds for future plans. PERSONNEL UPDATE During 2006, and since the beginning of 2007, a number of key personnel havejoined Petroceltic, including: Brian O'Cathain Executive ChairmanDermot Corcoran Technical ManagerSarah Sweeney Chief Financial OfficerHind Yassine Legal and Corporate AdvisorAlfie Scott Country Manager Algeria All have quickly become an integral part of the Petroceltic team and theirexperience and skill sets will prove invaluable as Petroceltic continues itsgrowth. We hope to continue to grow the organisation, at a rate appropriate to our assetbase expansion, by recruiting further high calibre personnel, in the year ahead. An operations office was opened in Algiers in May 2006 and a representativeoffice in Rome in September 2006. John Craven Chief Executive 20 June 2007 FINANCIAL REVIEW Petroceltic is financially robust with cash resources at 31 December 2006 of$33.4m. Taking year-end creditors into account, the net cash post 2006 drillingis $28m with no debt. 2006 FINANCIAL HIGHLIGHTS • Petroceltic raised $40m in April 2006 by way of a share placing of153,637,642 new ordinary shares, supported by RAB Capital plc who entered into a$25m underwriting agreement as part of that placing. The funds raised were used,in part, to fund the 2006 drilling programme of two successful wells in Algeria. • The loss for the year was $6.6m (2005: $2.4m). This loss includesexploration costs written-off (primarily relating to the drilling of the Donegalwell in Ireland) amounting to $5.7m. • Turnover of $1.26m (2005: $1m) comprises royalty income from theKinsale gas fields in Ireland. The increase was due to higher overall gasprices. • Interest income was $1.87m (2005: $912k); this two-fold increase ininterest received was a result of the funds raised in the earlier part of theyear. • There was a foreign currency gain of $545k (2005: loss of $325k).Petroceltic carefully manages its exposure to foreign currency risk. The gainwas a result of funds raised in sterling. • Administration costs were $2.6m (2005: $1.3m); this was due to anincrease in activity with resulting increases in administration and staff costs. • FRS 20 'share based payments' was adopted from 1 January 2006. The fairvalue of share options granted to employees and directors was recognised in theprofit and loss account as a cost of share awards of $1.8m (2005: $2.6m); thiswas a notional charge with no cash cost. • Intangible assets at year end are carried at cost of $42m (2005: $13m).The increase of $29m includes the cost of operations during 2006 with twoAlgerian exploration wells successfully drilled and tested. • Year-end cash at bank was $33m (2005: $19m). • Creditors of $5.3m (2005: $652k) are principally amounts owed at yearend in relation to drilling costs. SHARE INFORMATION Liquidity & share trading The Board believes that high liquidity is important in attracting majorinstitutional investors to Petroceltic. In 2006 Petroceltic had the highestliquidity of all stocks in the E&P sector on AIM. In March 2007, Petroceltic made a positive move to a new trading platformSETSmm. The SETSmm platform effectively channels liquidity in a more efficientmanner and allows trading through order books as well as market makers. It alsoreduces volatility, tightens the bid/offer spread and facilitates a bettermarket. SETSmm is currently used by both Main Market and liquid AIM companies,including those AIM companies who are constituents of the FTSE AIM UK 50 Index. Shares in issue The number of shares in issue at 31 December 2006 was 737,327,818. The totalnumber of share options and warrants outstanding at 31 December 2006 is89,629,000. The Petroceltic share price can be monitored at www.petroceltic.com. Shareholder profile Petroceltic currently has 8,830 shareholders with the majority of shares held byinstitutional UK based shareholders. The shareholding distribution at 8 June 2007 is as follows: Holdings Number of accounts Number of shares held1-1000 2,092 1,408,7841,001-5,000 3,300 8,701,7375,001-10,000 1,187 9,289,21710,001-100,000 1,858 60,068,692100,001-1,000,000 307 90,927,895over 1,000,000 86 566,931,493 8,830 737,327,818 The geographical distribution at 8 June 2007 is as follows: Distribution Number of accounts Number of shares heldRepublic of Ireland 5,176 155,188,209United Kingdom 3,583 579,986,213Other 71 2,153,396 8,830 737,327,818 CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended 31 December 2006 2006 2005* US$'000 US$'000Turnover 1,266 1,073ExpensesAmortisation (51) (92)Administration (2,577) (1,338)Exploration costs written off (5,756) -Foreign currency gain/(loss) 545 (325)Cost of share awards (1,832) (2,655) Operating loss on ordinary activities before interest (8,405) (3,337)Interest receivable and similar income 1,870 912Loss on ordinary activities before taxation (6,535) (2,425)Tax on loss on ordinary activities (102) (10)Loss for the financial year (6,637) (2,435) Loss per share in cents - basic (0.96) (0.42)Loss per share in cents - diluted (0.96) (0.42) CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS & LOSSESFor the year ended 31 December 2006 2006 2005* US$'000 US$'000 Loss for the financial year (6,637) (2,435)Currency translation differences on foreign currency net investments 1,842 (2,332)Total recognised gains and losses for the year (4,795) (4,767) Prior year adjustment 60 Total recognised gains and losses since last annual report (4,735) * As restated for FRS 20 'Share Based Payments' CONSOLIDATED BALANCE SHEETAs at 31 December 2006 2006 2005* US$'000 US$'000Fixed AssetsIntangible assets 41,767 13,147 Current AssetsDebtors 985 896Investments 56 57Cash at bank and in hand 33,410 19,476 34,451 20,429 Creditors (amounts falling due within one year) (5,263) (652)Net current assets 29,188 19,777 Net assets 70,955 32,924 Capital & reservesCalled up share capital 26,191 23,757Capital conversion reserve fund 51 51Share premium account 113,079 74,519Profit and loss account (68,366) (65,403) Shareholders' funds 70,955 32,924 * As restated for FRS 20 'Share Based Payments' CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 December 2006 2006 2005 US$'000 US$'000 Net cash inflow/(outflow) from operating activities 3,247 (1,023) Returns on investments and servicing of financeInterest received 1,870 912Net cash inflow on returns on investments and servicing of finance 1,870 912 Capital expenditure and financial investmentExpenditure on intangible assets (34,427) (5,925)Net cash outflow from capital expenditure and financial investment (34,427) (5,925) Net cash outflow before financing activities (29,310) (6,036) Financing activitiesIssue of shares, net of expenses 40,994 30Net cash inflow from financing activities 40,994 30 Increase/(decrease) in cash 11,684 (6,006) Reconciliation of net cash flow to movement in net debtIncrease/(decrease) in cash during the year 11,684 (6,006)Foreign exchange movement on cash balances 2,321 (3,929)Movement in net funds in the period 14,005 (9,935) Net funds at start of year 19,405 29,340 Net funds at end of year 33,410 19,405 Net funds is analysed as follows:Cash at bank and in hand 33,410 19,476Bank overdraft - (71) 33,410 19,405 21 June 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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