30th Jun 2006 07:02
Petroceltic International PLC30 June 2006 Petroceltic International plc Results for the Year Ended 31st December 2005 Petroceltic International plc("Petroceltic" or "the Company") is delighted toreport its full year results for the year ended 31st December 2005. Highlights for the period Algeria • Algerian Production Sharing Contract ratified by the Algerian Government • Awarded drilling contract to Schlumberger to drill two (wells in August / September 2006 • Three core areas delineated each having significant oil and gas potential • Major seismic campaign scheduled to commence before the end of the year • New drill targets being identified for a 2007 drilling campaign Italy • Increased interest in offshore licence (East Miglianico) from 15% to 40% • Developments progressing towards drilling East Miglianico in Q2 2007 • A new Independent Experts Report) estimate P50 oil reserves of 182 million barrels (73 million barrels net to Petroceltic) • Onshore Civitaquana (Petroceltic 40%) block provisionally awarded Ireland • Awarded fifteen year Frontier Licence over Atlantic margin block including the Inishbeg prospect • Rig secured for Inishbeg drilling in Q3 2006 • Record royalty proceeds for 2005 Tunisia • Plans underway to re-enter and test Sidi Toui 3 in second half of 2006 • Successful farmout of 40% to Independent Resources plc • New 2D seismic acquired and processed over the Oryx prospect Finances and Corporate • Kinsale Gas Field Royalty increased 149% to $1,073,000 • Raised US$40m in new equity capital since the year end and as of this date have strong balance sheet with over US$55m in cash • Intention to seek admission of the Company's ordinary shares to trading on the IEX Market of the Irish Stock Exchange which will further increase Petroceltic's profile amongst commercial and financial audiences and increase trading liquidity. Davy is acting as IEX Adviser and Broker to Petroceltic in respect of the admission. John Craven, Chief Executive of Petroceltic International plc said: "Petroceltic is in a very exciting phase of its development with the forthcomingdrilling of the Company's two wells in Algeria and the drilling of the Inishbegprospect offshore Donegal. We are making great progress in Italy and hope to bedrilling there before the middle of next year. We now have significant financialresources and have added to our management teams in Ireland and Algeria.Following what we anticipate will be a successful 2006 drilling programme we arewell poised to enhance shareholder returns with further drilling already beingscheduled for 2007. For further information, call: John Craven, Petroceltic International plc +353 14959285Billy Clegg/Edward Westropp, Financial Dynamics 020 7831 3113Ronnie Simpson, Simpson FTPR +353 1 2605300 The above 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. CHAIRMANS STATEMENT 2005 was a very important year in the development of Petroceltic. Following thesuccessful bid on the Isarene permit area in Algeria and the processing of alarge and valuable database of seismic and drill data, the company is poised toenter an exciting period of drilling and new seismic and well acquisition,expected to last for several years. In Ireland we will participate in anoffshore well northwest of Donegal. Some of our interests in Tunisia were farmedout while we increased our stake in the Miglianico East block offshore Italy.This marks the culmination of an aggressive acquisition programme focused onadvanced exploration opportunities combined with frontier exploration plays. It is clear that we are commencing a large and extensive exploration programmeon four attractive areas, some with potential for early production. Such anaggressive programme requires funding and in that regard the period has alsobeen successful financially. Since year end, your company raised $40 million innew equity capital, which means that Petroceltic has sufficient funds to delivera sustained drilling campaign across all its assets in the months ahead. The global outlook for upstream oil and gas companies continues to befavourable. Oil and gas prices continue to remain high without any noticeablesign of retreating. Demand is robust but a geopolitical overprint on oil pricesremains with tension in the Middle East and Nigeria. 2005 also witnessed the emergence of Russia as an important and strategicsupplier of hydrocarbon resources to European markets. This was exacerbated bythe cold winter which put pressure on gas supplies and caused unprecedented highgas prices in the winter months. This prompted a wake up call for utilities andoil companies alike who are now actively focussing on countries like Algeria tosecure future equity gas reserves. This continuing favourable background augurs well for Petroceltic. For instance,Algeria, where the company has substantial gas resource potential, alreadysupplies some 29% of Europe's natural gas consumption and has done so for manyyears. There are plans to substantially expand Algeria's gas export to Europe,increasing from 2.2 tcf gas/annum to 3.5 tcf gas/annum by 2010. This requiresinvestment throughout the upstream chain, from drilling for new reserves throughtransportation and marketing to new customers. Major infrastructure projects inAlgeria are now underway such as the Medgaz pipeline, which will link Algeria toSpain and is expected to be operational in 2009, delivering some 300 bcf gas/annum. Our assets are well positioned to benefit from this infrastructure. This increased demand for Algerian gas provides a major opportunity forPetroceltic to deliver value from its Algerian acreage where ten gas and two oildiscoveries have previously been made. The boom in oil and gas prices does however present many challenges to theindustry. In particular, there is a current shortage of drilling and seismicequipment. Also, skilled personnel are becoming harder to find as indeed aregood projects with ready to drill prospects. It therefore is a pleasure to report that Petroceltic has successfully secureddrilling rigs for Algeria with Schlumberger and, with its partners, for Ireland.The period has also seen an expansion of management and technical staff, withkey personnel being added to the organisation. It is worth re-emphasising thatall of our assets in Algeria, Tunisia, Italy and Ireland contain substantialready to drill prospects. ALGERIA A thorough technical analysis of available seismic and well data has delineatedthree core areas each having significant oil and gas potential and I am happy toreport that Petroceltic will commence drilling in Q3 2006. This Autumn we expectto complete two wells on sites with previous hydrocarbon shows. However thepotential of our extensive Algerian acreage of some 10,800 square kilometresmeans that this is just the start of what will be a continuous programme forseismic and drilling over the coming three to four years. We are very excited bythe number of targets emerging from our ongoing work and are optimistic for thecoming drilling programme. ITALY Evaluation is continuing in offshore block B.R268.RG (East Miglianico) followingthe Board's decision to increase the company's interest to 40% in what isbecoming an important and exciting asset for Petroceltic. An earlier welldrilled on the Elsa structure encountered a large oil column and appears to be acontinuation of the producing Miglianico field. In addition, a new IndependentExperts Report conducted estimates the P50 reserves of 182 million barrels onthe block, 73 million net to Petroceltic. The block is very near refininginfrastructure.. IRELAND A rig has been secured to drill the Inishbeg prospect offshore Donegal in Summer2006. This prospect is located within three blocks held jointly with othercompanies and a large structure in a similar setting to the Corrib gas field isthe target for the well. Petroceltic has a 16.25%)equity interest in the block. TUNISIA A successful farmout of 40% of Petroceltic's Ksar Hadada contract was completedshortly after the year end to enable further testing and evaluation of the SidiToui structure. A re-entry test of our 2004 well is planned towards the end ofthis year while seismic data on a second target is being assessed. FINANCIAL At year end, the group had net current assets of $19,777,000 (2004: $27,720,000)and income from Kinsale Gas Field was $1,073,000 (2004: $431,000). Ouradministrative expenses were $1,338,000 compared to $733,000 for the previousyear reflecting the increased level of activity during the year. Since the year end the Company raised approximately $40m following the recentissue of 153,637,642 ordinary shares at prices of Stg14p and Stg18p. Followingthis successful placing we have significantly expanded our institutionalshareholder support. ORGANISATION / PERSONNEL Petroceltic has continued to follow industry practice of outsourcing technicaland administration functions. However, key appointments have been made. I amdelighted to welcome Philip O'Quigley to the Board as full-time FinanceDirector. I would like to thank Con Casey for his wonderful contribution aspart-time Finance Director and he will of course continue to make a contributionas Non-Executive Director. A new operations office has been opened in Algiers to manage all operational,technical and administrative functions in the country. I am very pleased towelcome Alf Scott to Petroceltic as our Country Manager in Algiers. Alf has overtwenty years experience in working as an engineer in the petroleum basins ofAlgeria, particularly in well operations. We expect to be adding to these appointments over the coming months. It is with great sadness that in early 2006 we record the death of Dr. FabrizioRigo. He was not only the major shareholder in our Italian Joint Venture partnerCygam but a friend and supporter. He will be missed and our thoughts go out tohis family. WEBSITE The Petroceltic website www.petroceltic.com is used by the executives as aneffective medium for shareholder communication and I invite all shareholders tovisit the site for information and news updates. We encourage our shareholdersto avail of our e-communications option. STATUTORY MATTERS There are a number of resolutions before you for consideration at our AnnualGeneral Meeting. It is your Board's view that these resolutions are in the bestinterests of the company and I look forward to receiving your support for themat the forthcoming General Meeting. OUTLOOK In conclusion, the company has made large strides over the last twelve monthsand I continue to look to the future with confidence as the risk profile of ourassets reduces through the diligent work of the team. Important drillingcampaigns are about to commence in Algeria and offshore Ireland, as well asdrilling and well testing in Tunisia and Italy is planned for 2006 and 2007. All this is in addition to a positive industry background where the outlook forenergy producers continues to be positive. This confidence in the strategy andprojects of your company was demonstrated in the recent $40 million funding. The progress the company has made during the year would not have been possiblewithout the commitment of the company's Board, management and advisors. I wouldparticularly like to thank John Craven our CEO for his dedication to thecompany. We have already made significant progress in 2006 and we all lookforward to an exciting remainder of the year as the well drilling program bringsour strategy to fruition. Brian CusackChairman15 June 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended December 31, 2005 (in thousands of U.S. dollars, except (loss) per share) 2005 2004 Turnover 1,073 431 ExpensesOperations and exploration (92) (142)Administrative (1,338) (733)Foreign currency (loss)/gain (325) 490Cost of share awards (2,715) (2,419) Operating (loss) on ordinary activities (3,397) (2,373)Gain on disposal of investments - 411 (Loss) on ordinary activities before interest (3,397) (1,962)Interest receivable and similar income 912 525Interest payable and similar charges - (5) (Loss) on ordinary activities before taxation (2,485) (1,442)Tax on loss on ordinary activities (10) (121) (Loss) for the financial year (2,495) (1,563) (Loss) per share in cents - basic (0.43) (0.32) (Loss) per share in cents - diluted (0.43) (0.32) CONSOLIDATED BALANCE SHEETAs at December 31, 2005 (in thousands of U.S. dollars) 2005 2004 Fixed assetsIntangible assets 12,377 6,516 Current assetsDebtors 896 450Investments 57 57Cash at bank and in hand 19,476 29,340 20,429 29,847 Creditors (amounts falling due within one year) (652) (2,127) Net current assets 19,777 27,720 Net assets 32,154 34,236 Capital and reservesCalled up share capital 23,757 23,727Capital conversion reserve fund 51 51Share premium account 74,519 74,519Profit and loss account (66,173) (64,061) Total shareholders' funds (all equity interests) 32,154 34,236 CONSOLIDATED CASH FLOW STATEMENTFor the year ended December 31, 2005 (in thousands of U.S. dollars) 2005 2004 Net cash (outflow)/inflow from operating activities (1,023) 869 Returns on investment and servicing of financeInterest received 912 525Interest paid - (5) Net cash inflow from returns on investments and servicing of finance 912 520 Capital expenditure and financial investmentExpenditure on intangible assets (5,925) (5,161)Sale of intangible assets - 2,250Sale of investments - 411 Net cash (outflow) from capital expenditure and financial investment (5,925) (2,500) Net cash (outflow) before financing activities (6,036) (1,111) Financing activitiesIssue of shares, net of expenses 30 29,399Repayment of bank loan - (283) Net cash inflow from financing activities 30 29,116 (Decrease)/increase in cash (6,006) 28,005 Reconciliation of net cash flow to movement in net debt(Decrease)/increase in cash during the year (6,006) 28,005Foreign currency movement on cash balances (3,929) -Cash outflow from repayment of debt - 283 Movement in net funds in the year (9,935) 28,288Net funds at start of year 29,340 1,052 Net funds at end of year 19,405 29,340 Net funds is analysed as follows:Cash at bank and in hand 19,476 29,340Bank overdraft (71) - 19,405 29,340 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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