Half-yearly Report

29 September 2014 Doriemus PLC Half-yearly results for the six month period ended 30 June 2014 I am pleased to present the interim results for the six months ended 30 June2014. Overview The Company has a strong balance sheet with no debt and current assetsincluding cash as at 30 June 2014 amounting to £1,315,000 and eagerly awaitsresults from the drilling of the HorseHill-1 well in the Weald Basin just northof Gatwick Airport. The Company has acquired three exciting investments during the year which webelieve will enhance future shareholder value. Your board of directors will continue to seek out further investments in the UK"conventional" oil and gas space and work closely with Angus Energy Limited onways of increasing our oil production from the existing operating fields. The next financial year should see significant improvements in production attwo of Angus Energy's licences (Lidsey and Brockham) with new production wellsproposed to be drilled on both. We should also know the outcome of the HorseHill-1 well. We will also continue to seek out further investments in line with theCompany's investment strategy. The Company announced on 12 September 2014 that the disposal of TEP Exchange("TEP"), as announced on 18 July 2014, had now completed. This concludes the transition of the Company from the historical TEP ExchangeGroup Plc, whose primary business was unsuccessful in the licensing and on-lineadvertising of TEP's proprietary electronic platform, to a company with a newfocus of investing in conventional oil and gas production and explorationactivities in the UK. This disposal technically constitutes a change of business for the purpose ofRule 15 of the AIM Rules for Companies and therefore the Company is, witheffect from 12 September 2014, re-classified as an investing company with afocus on natural resources. Investments Horse Hill Prospect: The Company currently has a 10% equity interest in Horse Hill Development Ltd("HHDL"), a special purpose company, which holds the rights to a 65%participating interest and operatorship, in licences PEDL 137 and PEDL 246onshore in the UK Weald Basin in Surrey ("Horse Hill Prospect"). MagellanPetroleum Corporation holds the balance of 35%. HHDL is in the process of drilling the Horse Hill-1 well to an estimated totaldepth of 8,680 feet to test conventional stacked oil and gas targets. TheMarriott 50 rig started drilling on the Horse Hill Prospect, which is locatedon the northern side of UK Weald Basin near Gatwick Airport, on 22 September2014 and the drilling is scheduled to be completed during November. On 29 September 2014, the Company advised that the Horse Hill-1 well has nowbeen drilled to the second casing point at 1,795 feet measured depth ("MD"),and the setting and cementing of a 13 3/8-inch steel casing is now underway.The bottom of the well is currently located in the upper part of the Jurassicand the well has encountered the expected mud gas up to C3 (propane) andmineral fluorescence just above current well depth. Geological analysis and mud logging from rock cuttings circulated out of thehole indicate that geological markers in the well are slightly shallower thaninitially prognosed based on seismic and the nearby Collendean - 1 well drilledby ESSO in 1964. The second casing point has been revised up from 1,865 feet MDto reflect this. The Horse Hill-1 well is located on the northern side of UK Weald Basin nearGatwick Airport and is planned to drill to a Total Depth ("TD") of 8,680 feetmeasured depth ("MD") to test a number of conventional oil and gas targets. Theprimary oil reservoir targets in this well lie in the Jurassic PortlandSandstone at about 2,200 feet true vertical depth below sea level ("TVD ss")and the Corallian Sandstone at about 3,440 feet TVD ss. There are also a numberof secondary oil targets in the Jurassic aged formations, including the GreatOolite Limestone, estimated to be at 4,530 feet TVD ss. After penetrating theJurassic the well will be drilled to terminal depth in order to test forTriassic aged formations, which are expected to contain gas. After setting the 13 3/8-inch casing, a 12 ½-inch hole will be drilled to adepth of approximately 5,900 feet MD where open-hole electric logs will beacquired through the prognosed oil reservoirs before setting a 9 5/8-inchcasing. Then an 8 ½-inch hole will be drilled to TD in order to test forTriassic aged formations, which are expected to contain gas. The Horse Hill-1 well is planned to test a number of conventional stacked oiltargets at the proven productive Portland sandstone, Corallian sandstone andGreat Oolite limestone levels. Prospective recoverable resources totalling amean 87 million barrels ("mmbbls") have been estimated; with an additional mean164 billion cubic feet ("bcf") of recoverable prospective resources proposedwithin the deeper Triassic gas play. The Company further announced on 4 September 2014 that as a direct result ofdrilling operations commencing at Horse Hill, HHDL additionally owns a 65%participating interest in the adjacent United Kingdom Petroleum Exploration andProduction Licence ("PEDL") 246. PEDL 246 covers an area of 43.58 km2 (10,769 acre) immediately east of andadjacent to the 99.29 km2 (24,525 acre) Horse Hill PEDL 137 located in Surrey,where the Horse Hill-1 well is currently being drilled. The transfer of the 65%interest in PEDL 246 to HHDL from Magellan Petroleum (UK) Limited, a subsidiaryof Magellan Petroleum Corporation, is conditional only on gaining finalapproval from the UK Secretary of State for Energy and Climate Change. Brockham Oil Field (10% owned by DOR and operated by Angus Energy): The Brockham Oil Field ("Brockham"), in the Weald Basin, is held under UnitedKingdom Production Licence PL 235. Oil production is currently 55 bpod.Brockham's 28 API oil is regularly trucked and sold to the Perenco Oil Refineryin southern England. Angus Energy have advised that they are still currently attending to one finalpermit issue in relation to the planned 450 metre side-track well at Brockhamand will update the Company on further news. An appropriate drill rig is onstandby to undertake this side-track well, and it is planned to mobilise therig to site once the new mining waste permit has been issued and aftercompletion of drilling of the Horse Hill-1 well. In preparation for the expected increase in oil production, post theside-track, Angus Energy has now completed the refurbishment of the1,200-barrel storage tank facilities. In March 2014, the Company announced that RPS Energy Consultants Limited("RPS") had independently assessed that, as at 31 December 2013, the BrockhamField contains 3.62 million barrels (gross) Oil In-place (P50 best case). Lidsey Oil Field (20% owned by DOR and operated by Angus Energy): The Lidsey Oil Field ("Lidsey"), in the Weald Basin, is held under UnitedKingdom Production Licence PL 241. Oil production is currently 30 bopd. Lidsey has a fully permitted and operational 2,000-barrel storage facility andits 38 API oil is regularly trucked and sold to the Perenco Oil Refinery. In March 2014, the Company announced that RPS had independently assessed that,as at 31 December 2013, the Lidsey Field contained 9.52 million barrels (gross)of P50 best case Oil In-Place. Drilling of a new Lidsey-2 well has now been postponed until after thecompletion of drilling of the Horse Hill-1 well. Financial Results During the period, the Company made a loss before taxation of £266,000 (6months ended 30 June 2013: profit £31,000, 12 months ended 31 December 2013:loss £450,000). There was a weighted loss per share of 0.01p (30 June 2013:profit per share 0.002p, 31 December 2013: loss per share 0.02p). Current assets including cash at 30 June 2014 amounted to £1,315,000 (30 June2013: £592,000; 31 December 2013: £1,992,000). Outlook Your Board is confident that the investments made by the Company are bothencouraging and potentially rewarding. We will look to realise this potentialover the future years in addition to continuing to review other investmentopportunities. The Board would like to take this opportunity to thank our shareholders, staffand consultants for their continued support. Donald StrangChairman 29 September 2014 For further additional information please contact: Doriemus plc +44 (0) 20 7440 0640Donald Strang/Hamish Harris Cairn Financial Advisers LLP +44 (0) 20 7148 7900Nominated Adviser and BrokerJames Caithie/Jo Turner/Carolyn Sansom Square1 Consulting +44 (0) 20 7929 5599David BickMark Longson Glossary: up to C3 (propane) - hydrocarbon gas liquids from spectrometry showing thepresence of C1 (methane), C2 (ethane) and C3 (propane) MD - measured depth mineral florescence - light emitted by natural minerals showing, in somecircumstances, the presence of hydrocarbons mud gas - gases recovered from the drilling fluids (mud) TD - total depth TVD ss - true vertical depth below sea level Company Statement of Comprehensive Incomefor the six months ended 30 June 2014 Six months Six months Year ended ended ended 30 June 30 June 31 December 2014 2013 2013 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Revenue 66 100 203 Cost of Sales (54) - - Gross Profit 12 100 203 Administrative expenses (178) (71) (419) Share based payment charge - - (236) (Loss) / profit from operations (166) 29 (452) Investment in subsidiary written-off (100) - - Finance income - 2 2 (Loss) / profit before income tax (266) 31 (450) Income tax expense - - - (Loss) / profit attributable to the (266) 31 (450)owners of the parent and totalcomprehensive (expense) / income forthe period (Loss) / earnings per share (Note 3) Basic (loss) / earnings per share (0.01)p 0.002p (0.02)p Diluted (loss) / earnings per share (0.01)p 0.002p (0.02)p Company Statement of Changes in Equityfor the six months ended 30 June 2014 Share Share Share Based Retained Total Capital Premium Payment Earnings Equity Reserve (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) £'000 £'000 £'000 £'000 £'000 At 1 January 2013 9 - 336 336 Dividends on ordinary - - - (296) (296)shares declared andpaid Shares issued in 38 2,360 - - 2,398period Share issue costs - (80) - - (80) Share based payments - - 236 - 236 38 2,280 236 (296) 2,258 (Loss) for the year - - - (450) (450)and totalcomprehensive income At 31 December 2013 47 2,280 236 (410) 2,153 Shares issued in 6 536 - - 542period Share issue costs - (30) - - (30) 6 506 - - 512 (Loss) for the year - - - (266) (276)and totalcomprehensive income At 30 June 2014 53 2,786 236 (676) 2,399 Company Statement of Financial Positionas at 30 June 2014 As at As at As at 30 June 30 June 31 December 2014 2013 2013 (unaudited) (unaudited) (audited) £'000 £'000 £'000 ASSETS Non-current assets Intangible assets 1,016 - 1,016 Available for Sale Investment 600 - - Total non-current assets 1,616 - 1,016 Current assets Subsidiary held for sale - 100 100 Trade and other receivables 148 186 507 Derivative financial instruments 382 - 400 Cash and cash equivalents 785 306 985 Total current assets 1,315 592 1,992 TOTAL ASSETS 2,931 592 3,008 LIABILITIES Current liabilities Trade and other payables (532) (300) (855) Total current liabilities (532) (300) (855) TOTAL LIABILITIES (532) (300) (855) NET ASSETS 2,399 292 2,153 Equity attributable to equity holdersof the parent Share capital 53 30 47 Share premium reserve 2,786 191 2,280 Share based payment reserve 236 - 236 Retained earnings (676) 71 (410) TOTAL EQUITY 2,399 292 2,153 Company Statement of Cash Flowsfor the six months ended 30 June 2014 Six months Six months Year ended ended ended 30 June 30 June 31 December 2014 2013 2013 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Cash flows from operating activities Operating (loss) / profit (166) 31 (450) Share based payment charge - - 236 Finance costs (net) - (2) (2) Decrease / (increase) in trade and 359 (16) (94)other receivables (Decrease) / increase in trade and (673) (31) (16)other payable Cash generated by operating activities (480) (18) (326) Cash flows from investing activities Payments for intangible assets - - (390) Payment for AFS Investment (250) - - Loans repaid from / (granted) to - 375 375related parties Interest received - 2 2 Net cash used in investing activities (250) 377 (13) Cash flows from financing activities Proceeds from issuance of ordinary 542 212 1,629shares Share issue costs (30) - (40) Income from derivative financial 18instruments Dividends paid to owners of the parent - (296) (296) Net cash used in financing activities 530 (84) 1,293 Net increase in cash and cash (200) 275 954equivalents Cash and cash equivalents at beginning 985 31 31of period Cash and cash equivalents at end of 785 306 985period Cash and cash equivalents comprise: Cash available on demand 785 306 985 Notes to the half-yearly results 1. Basis of preparation As permitted IAS 34, `Interim Financial Reporting' has not been applied tothese half-yearly results. The financial information of the Company for the sixmonths ended 30 June 2014 have been prepared in accordance with the recognitionand measurement principles of International Financial Reporting Standards,International Accounting Standards and Interpretations (collectively "IFRS")issued by the International Accounting Standards Board ("IASB") as adopted bythe European Union ("adopted IFRS") and are in accordance with IFRS as issuedby the IASB. The condensed interim financial information has been preparedusing the accounting policies which will be applied in the Company's statutoryfinancial statements for the year ending 31 December 2014. The financial information shown in this publication is unaudited and does notconstitute statutory accounts as defined in Section 434 of the Companies Act2006. The comparative figures for the financial year ended 31 December 2013have been derived from the statutory accounts for 2013. The statutory accountshave been delivered to the Registrar of Companies. The auditors have reportedon those accounts; their report was unqualified and did not contain statementsunder the section 498(2) or 498(3) of the Companies Act 2006. 2. Dividends June June December 2014 2013 2013 £`000 £`000 £'000 Interim dividend paid - (296) (296) 3. (Loss) / earnings per share The calculation of the basic and diluted (loss) / earnings per share is basedupon June June December 2014 2013 2013 Basic (loss) / earnings per share (0.01)p 0.002p (0.02)p(pence) Diluted (loss) / earnings per (0.01)p 0.002p (0.02)pshare (pence) (Loss) / profit attributable to £265,982 £31,443 £(450,307)equity shareholders Weighted average number of shares 4,911,104,970 2,016,795,578 2,791,780,820basic Weighted average number of shares 5,542,983,423 2,016,795,578 2,929,972,601diluted 4. Availability of the Interim Report Copies of the report will be available from the Company's registered office andalso from the Company's website www.doriemus.co.uk