26th Sep 2006 08:00
Gold Oil PLC26 September 2006 FOR IMMEDIATE RELEASE 26 September 2006 GOLD OIL ("Gold Oil" or the "Company") REPORT AND ACCOUNTS FINAL RESULTS FOR THE YEAR ENDED 30 APRIL 2006 Chairman's Statement Although Gold Oil is a company that only floated on AIM on 14 July 2004 it hasrapidly built a strong acreage position in Peru, and is seeking to do the samein Colombia and Brazil, and in July 2006 Gold Oil spudded its first well on theonshore Block XXI. The management in Peru has built an excellent relationshipwith a Peruvian, Lima based, Exploration and Petroleum Engineering consultancythat has proven of great value in analysing opportunities in Peru, Colombia andBrazil and identifying and providing experienced staff to assist with ourexploration well in Peru on Block XXI. The high potential of the Company's BlockZ34 is reflected by the farm-in by Plectrum which will allow a major seismicprogramme on this unexplored block to be carried out at no cost to the Companybut still leaving us with a large equity position with which to benefit fromexploration success. In Colombia the Company's farm-in to the Nancy-Burdine-Maxine block containingthree fields that were abandoned some years ago by a major oil company asnon-material when oil prices collapsed. First results are due in September. In Spain, in the Ayoluengo field, a programme of well re-entries and perforationof intervals that have never been produced will start in July 2006 and it isexpected that incremental production can be achieved and funded out of existingcash flow. The Company raised £2.5 million in June 2006 through a placement to allow theCompany to fund existing projects and also allow us to react quickly to newopportunities. At the end of the year the Group showed a loss of £557,000 and acash balance of £2,460,000 reflecting the leanness of the Group and the massiveincrease in the Group's exploration and production acreage. Looking ahead we plan to consolidate and continue activity on our current assetsin Peru and Colombia and continue to add low risk projects with potential forearly cash flow in South America. The last year has been a very busy and successful one for the Company and Icongratulate everyone in our small team in Peru for their dedication andprofessionalism. Against a background of Presidential elections in Peru andColombia in June 2006 this has been a real achievement. I look forward to meeting you all at our forthcoming annual general meeting inwhich our accounts will be laid before the Company. Michael BurchellChairman Consolidated Profit and Loss Account for the year ended 30th April 2006 Note 2006 2005 £000 £000Turnover - -Administration expenses (698) (383 ) Operating loss (698) (383 )Other interest receivable and similar income 5 141 9 Loss on ordinary activities before taxation 2-4 (557) (374 )Taxation credit on loss on ordinary activities 6 - - Loss for the year for group (557) (374 ) Loss: Earnings per ordinary share 8- Basic (0.16p) (0.18p )- Diluted (0.14p) (0.15p ) A note on historical gains or losses has not been included as part of thefinancial statements as the results as disclosed in the profit and loss accountare prepared on an unmodified historical cost basis. There were no other recognised gains or losses in the period. Consolidated Balance Sheet as at 30th April 2006 2006 2005 Note £000 £000 £000 £000Fixed assetsTangible assets 9 22 25Intangibles 10 299 -Investments 11 192 - 513 25Current assetsDebtors 12 290 39Cash at bank and in hand 2,460 3,632 2,750 3,671Creditors: amounts falling due within 13 (103 ) (116 )one year Net current assets 2,647 3,555 Total assets less current liabilities 3,160 3,580 Capital and reservesCalled up share capital 14 90 86Share premium account 15 4,004 3,868Profit and loss account 15 (934) (374 ) Equity shareholders' funds 3,160 3,580 Company Balance Sheet as at 30th April 2006 2006 2005 Note £000 £000 £000 £000Fixed assetsTangible fixed assets 9 2 2Intangibles 10 299 -Investments 11 804 150 1,105 152Current assetsDebtors 12 149 32Cash at bank and in hand 2,272 3,606 2,421 3,638Creditors: amounts falling due within one 13 (92 ) (113 )year Net current assets 2,329 3,525 Total assets less current liabilities 3,434 3,677 Capital and reservesCalled up share capital 14 90 86Share premium account 15 4,004 3,868Profit and loss account 15 (660) (277 ) Equity Shareholders' Funds 3,434 3,677 Consolidated Cash Flow Statement for the year ended 30th April 2006 Note 2006 2005 £000 £000Cash flow statementCash outflow from operating activities 17 (950) (306 )Returns on investments and servicing of finance 18 141 9Capital Expenditure 18 (503) (25 ) (1,312) (322 )Management of liquid resources 18 - (1,800 )Financing 18 140 3,954 Increase in cash in the year (1,172) 1,832 Reconciliation of net cash flow to movement in netfunds (Decrease)/ Increase in cash in year (1,172) 3,632Deposits treated as liquid resources - (1,800 ) (1,172) 1,832Opening net debt 3,632 - Closing net debt 2,460 1,832 Statement of total recognised gains and loss for the year ended 30th April 2006 2006 2005 £000 £000 Loss for the year for the Group (557) (374)Foreign exchange reserves (3) - Total recognised loss for the year (560) (374) Notes (forming part of the financial statements) 1. Accounting policies The following accounting policies have been applied consistently in dealing withitems which are considered material in relation to the Group's financialstatements. Basis of accounting The financial statements have been prepared in accordance with applicableaccounting standards and under the historical cost accounting rules. Basis of consolidation The consolidated financial statements include the financial statements of theCompany and its subsidiaries, joint venture and associated undertakings. Assets and liabilities of overseas subsidiary undertaking are translated intosterling at rates of exchange ruling at the balance sheet date. The results andcash flows of overseas subsidiaries are translated into sterling using averagerates of exchange. Exchange adjustments arising when the opening net assets andthe loss for the year are taken directly to reserves and reported in thestatement of total recognised gains and losses. Under section 230(4) of the Companies Act 1985 the Company is exempt from therequirement to present its own profit and loss account. The results of the associate are based upon statutory for period ending on 30September. Where subsidiaries, joint ventures and associates are acquired ordisposed of during the year, results are included from the date of acquisitionor to the date of sale. Goodwill arising on acquisition represents the difference between the fair valueof the consideration given over the fair value of the identifiable net assetsacquired and is capitalised and amortised over its useful life of 20 years. Associates An associate is a company, other than a subsidiary or joint venture, in whichthe group has a long term participating interest and exercises significantinfluence. The profit and loss account includes the group's share of turnover,operating profit/(loss) and interest of associates. Investment in associates areshown in the group balance sheet at the group's share of the underlying netassets of the companies concerned less provisions where appropriate. Tangible fixed assets and depreciation Depreciation is provided to write off the cost less the estimated residual valueof tangible fixed assets by equal instalments over their estimated usefuleconomic lives subject to the following periods: Motor vehicle -5 years Office Equipment -4-10 years Taxation The charge for taxation is based on the profit for the year and takes intoaccount taxation deferred because of timing differences between the treatment ofcertain items for taxation and accounting purposes. Deferred tax is recognised,without discounting, in respect of all timing differences between the treatmentof certain items for taxation and accounting purposes which have arisen but notreversed by the balance sheet date, except as otherwise required by FRS19. Investments Fixed asset investments are stated at cost less provision for diminution invalue. Foreign exchange Foreign currency transactions are translated to sterling at the rate of exchangeprevailing at the transaction date. Monetary assets and liabilities denominatedin foreign currency are translated into sterling at the rate of exchangeprevailing at the balance sheet date. Exchange differences are taken to theprofit and loss account. Cash and liquid resources Cash at bank and in hand includes short-term deposits with banks with initialmaturity of three months or less. Cash, for the purpose of the cash flow statement, comprises cash in hand anddeposits repayable on demand, less overdrafts payable on demand. Oil and natural gas assets Exploration and development expenditure is accounted for under the 'successfulefforts' method. The successful efforts method means that the only costs whichrelate directly to the discovery and development of specific oil and gasreserves are capitalised. Exploration and evaluation costs are capitalised within intangible assets.Capital expenditure on producing assets are accounted for in accordance withSORP 'Accounting for Oil and Gas Exploration'. Costs incurred prior to obtaininglegal rights to explore are expensed immediately to the income statement. All lease and licence acquisition costs, geological and geophysical costs andother direct costs of exploration, evaluation and development are capitalised asintangible or property, plant and equipment according to their nature.Intangible assets comprise costs relating to the exploration and evaluation ofproperties which the directors consider to be unevaluated until reserves areappraised as commercial, at which time they are transferred to property, plantand equipment following an impairment review and depreciated accordingly. Whereproperties are appraised to have no commercial value, the associated costs aretreated as an impairment loss in the period in which the determination is made. Costs are amortised on a field by field unit of production method based oncommercial proven and probable reserves. The calculation of the 'unit of production' amortisation takes account of theestimated future development costs and is based on the current period endunescalated price levels. Changes in reserves and cost estimates are recognisedprospectively. 2. Pre-production costs Pre production costs incurred in Peru and which have been expensed in the periodwere £163,000 (2005 - £94,000). 3. Loss on ordinary activities before taxation 2006 2005 £000 £000Loss on ordinary activities before taxation is statedafter chargingAuditors' remuneration:Group - audit 10 8Company - audit 10 6Group - non audit services 23 10Depreciation 6 -Amortisation of goodwill 8 - 4. Staff number and costs The average number of persons employed by the group (including directors) duringthe year, analysed by category, were as follows: 2006 2005Technical and administration 6 6 The aggregate payroll costs of these persons were as follows: 2006 2005 £000 £000Wages and salaries 64 26Social security costs 6 3 70 29 5. Interest receivable and similar income 2006 2005 £000 £000Bank interest 141 9 6. Taxation Analysis of charge in period: 2006 2005 £000 £000UK and overseas corporation taxCurrent tax on income for the period - -Total current tax - - Tax on loss on ordinary activities - - Factors affecting the tax charge for the current period.The current tax charge for the period is higher than the 2006 2005standard rate of corporation tax in the UK 30%. The £000 £000differences are explained below:Current tax reconciliationLoss on ordinary activities before tax (557) ) (374 ) Current tax at 30% (167) ) (112 )Effects of:Expenses not deductible for tax purposes - -Increase in tax losses 167 112 Total current tax charge (see above) - - -- At 30 April 2006 the Group had net operating losses to carry forward of £821,000(2005 - £374,000). The deferred tax asset on these tax losses at 30% of £246,000(2005 - £112,000) has not been recognised due to the uncertainty of recovery. 7. Loss for the financial period As permitted by section 230 of the Companies Act 1985, the holding company'sprofit and loss account has not been included in these financial statements. Theloss for the financial year is made up as follows: 2006 2005 £000 £000Holding company's loss 383 277 8. Loss per shareLoss per ordinary share- Basic (0.16) (0.18 )- Diluted (0.14) (0.15 ) Loss per ordinary share is based on the Group's loss for the financial year of£557,000 (2005 - £374,000). The weighted average number of shares used in the calculation is the weightedaverage ordinary shares in issue during the year. 2006 2005 Number NumberWeighted average ordinary shares in issue during the 349,869,589 212,791,361yearPotentially dilutive warrants issued 43,981,918 39,305,624 Weighted average ordinary shares for diluted earning 393,851,507 252,096,985per share 9. Tangible fixed assets Equipment Vehicle Total and Machinery £'000 £000 £000GroupCostAt beginning of year 6 19 25Additions 4 - 4Disposals (2) - (2) At end of year 8 19 27 DepreciationAt beginning of yearCharge for the year 2 4 6On Disposals (1) - (1)At end of year 1 4 5 Net book valueAt 30 April 2006 7 15 22 At 30 April 2005 6 19 25 CompanyCostAt beginning of year 2 - 2Additions 1 - 1 At end of year 3 - 3 Depreciation At beginning of year - - -Charge for the year 1 - 1At end of year 1 - 1 Net book valueAt 30 April 2006 2 - 2 At 30 April 2005 2 - 2 10. Intangible fixed assets Deferred Exploration costs £000Company and GroupCostAt beginning of year -Expenditure 299 At end of year 299 The expenditure above represents the acquisition of an interest in theNancy-Burdine- Maxine Oil fields through the Company's Colombian branch. Thevalue of the Group's investments in these assets is dependant on thedevelopment of the oil reserves. Should this prove unsuccessful, the valueincluded above would be written down. 11. Fixed asset investmentsGroup Goodwill on Share of Listed Total acquisition Associate's Investments of Associate Net Deficit Cost £000 £000 £000 £000At beginning of year - - - -Additions 267 (117) 50 200 At end of year 267 (117) 50 200 AmortisationCharge for the year 8 - - -At end of year 8 - - - Net book valueAt 30 April 2006 259 (117) 50 192 The market value of the listed investments was £33,333 at 30 April 2006. 11. Fixed asset investments Company Investment Listed Loan to Shares in Total Shares in in investment group group group Associate undertaking undertaking undertaking 2006 2005Cost £000 £000 £000 £000 £000 £000At beginning of - - - 150 150 -yearAdditions 150 50 454 - 654 150 At end of year 150 50 454 150 804 804 The Company's subsidiary undertakings at the year end were a 100% interest inthe ordinary shares of: Gold Oil Peru, a company registered in Peru whose principal activity isexploration of oil and gas. The Company also had a 50% interest in the ordinary shares of : Northern Petroleum Exploration Ltd., a company registered in the United Kingdomwhose principal activity is the production of oil and gas in Spain. The lastaccounting period end was 30 September 2005. 12. Debtors 2006 2005 Group Company Group Company £000 £000 £000 £000Trade debtors - - 14 -Other debtors 173 32 5 5Amounts owed by subsidiary and associate 111 111 - 12undertakingsPrepayments and accrued income 6 6 20 15 290 149 39 32 13. Creditors: amounts falling due within one year 2006 2005 Group Company Group Company £000 £000 £000 £000Trade creditors 67 59 91 89Other creditors 5 2 4 3Accruals and deferred income 31 31 21 21 103 92 116 113 14. Called up share capital 2006 2005 £000 £000Authorised400,000,000 ordinary shares of £0.00025 each 100 100 Allotted, called up and fully paidEquity: 359,150,000 ordinary shares of £0.00025 each 90 86 On 29 June 2005, 3,750,000 ordinary shares were issued at 1p per share on theexercise of warrants. On 28 September 2005, 100,000 ordinary shares were issued at 1p per share on theexercise of warrants. On 28 February 2006, 10,000,000 ordinary shares were issued at 1p per share. On 8 March 2006, 100,000 ordinary shares were issued at 1p per share. On 2 May 2006, 5,000,000 ordinary shares were issued at 7.5p per share. On 16 May 2006, 4,020,000 ordinary shares were issued at 7.5p per share. On 8 June 2006, 36,155,000 ordinary shares were issued at 7.5p per share. On 13 June 2006, 6,825,000 ordinary shares were issued at 7.5p per share. On 16 August 2006, 1,000,000 ordinary shares were issued at 7.5p per share. On 7 September 2006, 575,000 ordinary shares were issued on the exercise ofwarrants 15. Share premium and reserves Share Profit premium and account loss £000 account £000GroupAt beginning of year 3,868 (374)Loss for the period - (557)Foreign Exchange Reserves - (3)Premium on share issues 136 - At end of year 4,004 (934 ) Share Profit premium and account loss £000 account £000CompanyAt beginning of year 3,868 (277)Loss for the period - (383)Premium on share issues 136 - At end of year 4,004 (660) 16. Reconciliation of Movements in Shareholders' Funds for the year ended 30thApril 2006 2006 2005 2006 2005 £000 £000 £000 £000 Group CompanyOpening shareholders' funds 3,580 - 3,677 -Loss for the financial year (557) (374) (383) (277)Foreign exchange reserves (3) - - -Increase in share capital 140 3,954 140 3954 Closing shareholders' funds 3,160 3,580 3,434 3,677 17. Reconciliation of operating loss to operating cash flows 2006 2005 £000 £000Operating loss (698) (383 )Depreciation and Amortisation 14 -(Increase) in debtors (255) (39 )Increase in creditors (14) 116Foreign exchange reserves 3 - Net cash outflow from operating activities (950) (306 ) 18. Analysis of cash flows 2006 2005 £000 £000Returns on investment and servicing of financeInterest received 141 9 Capital expenditure and financial investmentPurchase of tangible fixed assets (4) (25)Purchase of Investments (50) -Purchase of Associate (150) -Purchase Intangible asset (299) - ---- ---- Total (503) (25) Management of liquid resourcesIncrease in short term bank deposits - 1,800 FinancingIssue of ordinary share capital 140 3,954 19. Directors' emoluments and interests The directors who held office during the period are shown below along with theirinterests in the 0.025p ordinary shares of the company. Interest Interest at end of at start period of periodExecutive directorsM N Burchell 3,000,000 3,000,000P G Mahony - -J G Moore 20,000,000 20,000,000 Directors' emoluments and other benefits are as listed below. 2006 2005 £000 £000Directors' remuneration 42 14Directors' fees 98 38 140 52 Warrants held by the directors are as follows: No. of WarrantsM N Burchell 2,300,000J G Moore 9,200,000P G. Mahony 2,300,000 Total Warrants held by the directors 23,000,000 20. Financial instruments The Group's financial instruments comprise trade creditors, cash and short termdeposits and equity shares. The Group has cash at bank. This is placed on short term deposit to maximise theGroup's liquid resources and no interest rate hedging is undertaken. Short-term debtors and creditors The Group has taken advantage of the exemptions available under FRS 13 andexcluded Short-term debtors and creditors from its disclosure of financialinstruments. The Group does not presently have any long term debtors orcreditors. Foreign currency risk The Group reports in sterling. However, a significant proportion of itsactivities may be undertaken in foreign currencies. Exchange rates are monitoredin conjunction with forecast currency requirements and the Group will enter intoforward exchange contracts to hedge its foreign currency exposure whereappropriate. No forward foreign exchange contracts were entered into during theperiod. There were no outstanding foreign exchange contracts at the start of theperiod or at the end of the period. 21. Contingent Liabilities The Group has given guarantees of $150,000 to PeruPetro SA to fulfil agreementsto explore certain areas. 22. Related party disclosures Gold Oil Plc is listed on the Alternative Investment Market (AIM) operated bythe London Stock Exchange. At the date of the Annual Report in the Directorsopinion there is no controlling party. Note to the announcement: This announcement does not constitute a full financial statement of theCompany's affairs for the year to 30 April 2006 (the "Period"). The auditorshave reported on the full financial statement for the Period. The report and accounts have been posted to Shareholders and are available, freeof charge, for a period of at least one month from Sandy Lodge, Sandy Lane,Kingswood, Surrey KT20 6ND. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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