16th Jun 2009 14:51
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For immediate release |
16 June 2009 |
Rift Oil plc
("Rift" or "the Company")
Final Results for the year ended 31 March 2009
Rift Oil PLC (AIM : RIFT), the oil and gas exploration company with assets in Papua New Guinea ("PNG"), is pleased to announce its final results for the year ended 31 March 2009.
Highlights
Recommended acquisition of the entire issued share capital of Rift at 13p per share by Talisman Energy Holdings Limited, a subsidiary of Talisman Energy Inc.
- Valuing the Company at £114.8m- A premium of 30% to the share price at close on 15 June 2009
Ian Gowrie-Smith, Chairman of Rift, commented :
"The Board of Rift Oil PLC are pleased that years of investment and hard work have culminated in this offer for the Company at a price that we believe suitably rewards shareholders. It is time for those with more significant resources to take over the challenge of development and commercialisation"
Further enquiries:
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Rift Oil plc |
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David Lees, Ian Gowrie-Smith |
020 7340 9970 |
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Buchanan Communications |
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Tim Anderson, Isabel Podda |
020 7466 5000 |
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RBC Capital Markets |
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Sarah Wharry |
020 7653 4804 |
Chairman's Statement
Earlier today the Board of Rift and Talisman Energy Holdings ("Talisman") announced that they had reached an agreement on the terms of recommended proposals for Talisman to acquire the entire issued and to be issued share capital of Rift for 13 pence per Rift Share.
After a successful exploration campaign on PPL 235 and the discovery of gas and oil condensates at Douglas, Puk-Puk and Langia, the Rift Board had a number of options available to it with respect to commercialisation. Given the scale of Rift's discoveries and the early stage of gas exploitation in Papua New Guinea ("PNG"), the Rift Board has always articulated the need for a partner to realise full value in the move from discovery to exploitation. In March 2007, Rift signed a memorandum of understanding ("MOU") with Alcan South Pacific Pty Ltd. ("Alcan") to develop the idea of supplying their Gove alumina facility with gas from Rift's discoveries. Additionally, Rift signed a MOU with Flex LNG in June 2008 to progress the concept of developing a floating liquefied natural gas offtake opportunity for Rift's gas.
In December 2008, Rift announced that it had entered into a formal process with RFC Group Limited and RBC to review the strategic alternatives available to it. Given the depressed state of the financial markets at that time, the outlook for oil and gas companies and the early nature of the discussions with Alcan and Flex LNG, the Rift Board felt it was prudent to fully assess the options available to it to fund and develop PPL 235 and PPL 261.
Following a comprehensive process, during which a broad range of parties were contacted, Rift announced, on 5 May 2009, that it had received a proposal from a major multi-national oil company to fund the drilling of up to four wells and 100km of seismic on its PPL 235 licence in Papua New Guinea in return for a significant equity interest in the licence.
The proposal was subject to further negotiation and agreement of the formal documents, the satisfaction of a number of pre-conditions, various Government approvals and the signing of definitive farm-in and joint operating agreements. Under this proposal Rift would retain 100 per cent. of the rights to the adjoining licence PPL 261, which the Rift Board regard as highly prospective.
At that time the proposed farm-in offer was the most preferred of a number of offers to emerge from the formal process.
Following the announcement made on 5 May 2009, the Rift Board received an approach from Talisman, who had been contacted as part of the formal strategic review, outlining an indicative offer to acquire the entire issued share capital of the Company at a substantial premium to the prevailing share price. In reaching its view to recommend that Rift Shareholders accept the Acquisition, in light of the proposal already in contemplation with the major multi-national oil company, the Rift Board considered a number of factors.
To fully exploit the Company's assets in PNG, Rift would be obliged to raise substantial amounts of capital either from the capital markets or from industry partners in the future. Given the challenging economic environment and depressed state of the capital markets in recent times, the Rift Board considers that there would be limited appetite from investors to support Rift throughout the exploration and development phase of its work programme. In addition, any funding from industry partners would reduce Rift's interest in the assets and any ultimate return to Rift Shareholders.
The Consideration represents a substantial premium to the Rift share price and, when weighed against the risks inherent in any project of this size and the lag time to commercialisation, the Directors of Rift intend unanimously to recommend that Rift Shareholders vote in favour of the Scheme Resolutions to enable the Acquisition to be effected.
Ian Gowrie-Smith
Chairman
16th June, 2009
Consolidated Income Statement
For the year ended 31 March 2009
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Notes |
Year to 31 March |
Year to 31 March |
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2009 |
2008 |
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£'000 |
£'000 |
|||
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Revenue |
- |
- |
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Administration expenses |
(2,146) |
(644) |
||
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Operating loss |
(2,146) |
(644) |
||
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Finance income |
125 |
346 |
||
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Loss before tax |
(2,021) |
(298) |
||
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Income tax |
- |
- |
||
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Loss for the period attributable to the equity shareholders |
(2,021) |
(298) |
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Loss per share - total and continuing |
||||
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Basic & diluted (pence per share) |
2 |
(0.27)p |
(0.051)p |
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Consolidated Balance Sheet
For the year ended 31 March 2009
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Notes |
31 March |
31 March |
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2009 |
2008 |
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£'000 |
£'000 |
||
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Assets |
|||
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Non-current assets |
|||
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Property, plant and equipment |
2,804 |
1,485 |
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Intangible assets |
3 |
22,476 |
12,771 |
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Total non-current assets |
25,280 |
14,256 |
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Current assets |
|||
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Trade and other receivables |
188 |
183 |
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Cash and cash equivalents |
165 |
8,427 |
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Total current assets |
353 |
8,610 |
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Current liabilities |
|||
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Trade and other payables |
(1,250) |
(203) |
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Total current liabilities |
(1,250) |
(203) |
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Net current (liabilities) / assets |
(897) |
8,407 |
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Net assets |
24,383 |
22,663 |
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Equity |
|||
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Capital and reserves |
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Issued capital |
7,958 |
6,974 |
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Share premium |
20,332 |
16,482 |
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Share based payment reserve |
144 |
57 |
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Translation reserve |
(1,059) |
121 |
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Retained earnings |
(2,992) |
(971) |
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Total equity |
24,383 |
22,663 |
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Consolidated Statement of Changes in Equity
For the year ended 31 March 2009
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Share capital |
Share premium |
Share based payment reserve |
Translation reserve |
Retained earnings |
Total equity |
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|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
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At 1 April 2007 |
4,041 |
8,975 |
9 |
(162) |
(673) |
12,190 |
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Exchange differences on translation of foreign operations |
283 |
283 |
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Net income recognised directly in equity |
283 |
283 |
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Loss for the period after tax |
(298) |
(298) |
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Total recognised income and expense |
283 |
(298) |
(15) |
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Issue of shares |
2,933 |
8,067 |
11,000 |
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Associated share issue costs |
(560) |
(560) |
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Equity settled share options |
48 |
48 |
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At 31 March 2008 |
6,974 |
16,482 |
57 |
121 |
(971) |
22,663 |
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Exchange differences on translation of foreign operations |
(1,180) |
(1,180) |
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Net income recognised directly in equity |
(1,180) |
(1,180) |
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Loss for the period after tax |
(2,021) |
(2,021) |
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Total recognised income and expense |
(1,180) |
(2,021) |
(3,201) |
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Issue of shares |
984 |
4,182 |
5,166 |
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Associated share issue costs |
(332) |
(332) |
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Equity settled share options |
87 |
87 |
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At 31 March 2009 |
7,958 |
20,332 |
144 |
(1,059) |
(2,992) |
24,383 |
Consolidated Cash Flow Statement
For the year ended 31 March 2009
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Year to 31 March |
Year to 31 March |
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2009 |
2008 |
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£'000 |
£'000 |
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Cash flows from operating activities |
|||
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Loss before tax |
(2,021) |
(298) |
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Adjustments for: |
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Depreciation |
282 |
94 |
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Share option charge |
87 |
48 |
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Finance income |
(125) |
(346) |
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Increase in trade and other receivables |
(5) |
(151) |
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Increase in trade and other payables |
1,047 |
25 |
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Net cash used in operating activities |
(735) |
(628) |
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Cash flows from investing activities |
|||
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Interest received |
125 |
346 |
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Payments for property plant and equipment |
(1,601) |
(17) |
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Payments for intangible assets |
(9,705) |
(3,207) |
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Net cash used in investing activities |
(11,181) |
(2,878) |
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Cash flows from financing activities |
|||
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Proceeds from issue of equity shares |
5,166 |
11,000 |
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Issue costs |
(332) |
(560) |
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Net cash generated by financing activities |
4,834 |
10,440 |
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Net (decrease) / increase in cash and cash equivalents |
(7,082) |
6,934 |
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Foreign exchange movements |
(1,180) |
292 |
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Cash and cash equivalents at the start of the period |
8,427 |
1,201 |
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Cash and cash equivalents at the end of the period |
165 |
8,427 |
Notes to the Final Results
Publication Of Non Statutory Accounts
The financial information set out in this announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985.
The consolidated balance sheet at 31 March 2009 and the consolidated income statement, consolidated statement of changes in equity, consolidated cash flow statement and associated notes for the year then ended have been extracted from the Group's 2009 statutory financial statements upon which the auditors opinion is unqualified and does not include any statement under Section 237 of the Companies Act 1985.
Those financial statements have not yet been delivered to the registrar of companies.
1. Basis of preparation
The consolidated financial statements are for the year ended 31 March 2009, have been prepared under the historical cost convention and are presented in sterling rounded to the nearest thousand (£000). They have been prepared in compliance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations as adopted by the European Union as at 31 March 2009.
Going Concern
The group meets its day to day capital requirements through a positive cash balance and has no borrowings at present. The group has no revenue and so incurred losses in the year. In common with other junior exploration companies, Rift is reliant on raising further funds periodically through equity finance or possibly debt facilities.
The nature of the group's business is such that there can be considerable unpredictable variation in the timing of cash flows. Bearing this in mind, the directors' have prepared projected cash flow information for the period ending 30 June 2010. The projections show the group will need to raise further funds in July 2009. The total funding required in the forecast period is approximately £1.6 million.
The company announced on 16 June 2009 that it has received an conditional offer from Talisman Energy Holdings Limited ("Talisman"), a subsidiary of Talisman Energy Inc. to acquire its entire share capital for 13p per share, valuing the company at £106 million. The board have unanimously recommended this offer to the shareholders but it is still subject to certain conditions and shareholder approval.
Talisman Energy Inc. currently has a market capitalisation of more than Canadian$16 billion. For the year ended 31 December 2008, Talisman Energy Inc. recorded a profit after tax of Canadian$3,519 million and had net assets at that date of Canadian$11,150 million. Talisman Energy Inc. has given assurances that they will continue to support the group for at least 12 months from the date the financial statements are approved in order that the group may continue in operation and meet its liabilities as they fall due.
Should the acquisition by Talisman be rejected by shareholders or be terminated for other reasons, then the combination of these circumstances would result in additional funding being required from alternative sources.
However, the directors believe that the acquisition by Talisman will be concluded. After making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts.
2. Loss per share
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Year to 31 March |
Year to 31 March |
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2009 |
2008 |
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£'000 |
£'000 |
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Loss for the year attributable to equity shareholders |
(2,021) |
(298) |
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Pence per share |
Pence per share |
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Basic and diluted loss per share |
(0.27) |
(0.051) |
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Shares |
Shares |
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Issued ordinary shares at start of the period |
697,445,332 |
404,111,999 |
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Ordinary shares issued in the period |
98,393,348 |
293,333,333 |
|
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Issued ordinary shares at end of the period |
795,838,680 |
697,445,332 |
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Weighted average number of shares in issue for the period |
758,470,715 |
586,042,782 |
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The diluted loss per share does not differ from the basic loss per share as the exercise of share options would have the effect of reducing the loss per share and is therefore not dilutive under the terms of IAS 33.
3. Intangible assets
|
Exploration and evaluation assets |
£'000 |
|
Cost |
|
|
1 April 2007 |
9,564 |
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Additions |
3,207 |
|
Cost and net book value at 31 March 2008 |
12,771 |
|
1 April 2008 |
12,771 |
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Additions |
9,705 |
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Cost and net book value at 31 March 2009 |
22,476 |
4. Events after the balance sheet date
Offer to acquire entire share capital
On 15 June 2009 Rift received an offer from Talisman to acquire the entire issued share capital of Rift for an offer price of 13p per ordinary issued share. The Directors of Rift have unanimously agreed to recommend shareholders vote in favour of the scheme resolutions.
Farm-In with Multi-National
On 5 May 2009, Rift announced that it had reached an agreement, subject to documentation, various Government approvals and the signing of definitive farm-in and joint operating agreements, with a major multi-national oil company to fund the drilling of up to 4 wells and 100km of seismic on its PPL235 licence.
Issue of shares
In May 2009 the Company raised £1.0 million by issuing 20 million shares at an issue price of 5.00 pence per share. Additionally Rift granted 10 million Warrants at 7.00 pence per warrant.
Board Changes
On 1 May 2009 Kisakui Posman joined the Board as a Non-Executive Director and Peter Wright replaced David Lees as Finance Director. Mr Lees remained on the Board as a Non-Executive Director.
Rift's annual report and accounts have been posted to shareholders and are available form the Company's website http://www.Riftoil.com/
Related Shares:
Rift Helium