31st Mar 2006 08:45
Max Petroleum PLC31 March 2006 MAX PETROLEUM PLC (AIM: MXP) INTERIM RESULTS ANNOUNCEMENT Max Petroleum Plc ("Max Petroleum" or "the Company"), an oil and gas explorationand development company with an initial focus on Kazakhstan, today provides itsmaiden interim results for the period ended 31 December 2005. HIGHLIGHTS Financial: • The Company listed on AIM, with the first day of dealings on Thursday 27th October 2005 • 73,920,000 shares placed at 35p raising £25.87m • Max also carried out an institutional placing in December 2005, raising £37.65m Operational: • Max Petroleum has built up a diverse portfolio of assets containing prospects with a wide range of risk / reward opportunities Blocks A&E • Part of the Pre-Caspian Basin of the Republic of Kazakhstan, which contains five super-giant sub-salt fields • A range of prospects exist in the 12,455 sq. kms of the contract area, ranging from low risk, low reward near term development opportunities to high risk, high reward exploration possibilities East Alibek • Located on the eastern margin of the Pre-Caspian basin, adjacent to the Alibekmola field, which is estimated to have reserves of 200 million bbls Astrakhansky • Located in the Atyrau oblast of Western Kazakhstan on the edge of the Kazakhstan-Russian border • The contract area totals 1272.6 square kilometres and is south-east of the giant Astrakhan gas-condensate field and adjacent to the Imashevsky field Corporate: • Recently announced the formation of an Advisory Board, chaired by Jim Langdon, one of three Senior Executive Partners of Akin, Gump, Strauss, Hauer & Feld, L.L.P. Also on the Advisory Board is Tom Fuller, a founding Partner in Diverse Energy Management Company • Steve Kappelle recently moved to the role of Chief Executive Officer, with Jim Jeffs becoming Executive Chairman and Ole Udsen moving to the role of Chief Operating Officer • Bob Holland, currently U.S. Executive Director to the World Bank, appointed as a Non-Executive Director, from April 27 2006 • Offices established in London and Almaty, Kazakhstan Forward Programme • In the process of carrying out a mix of both 2D and 3D seismic gathering programmes across its assets • The data will be analysed and targets identified for a drilling programme during 2006 • This will include high impact exploration drilling and the re-entry of existing wells to achieve early production, during Q2 2006. Jim Jeffs, Executive Chairman, commented: "This has been an eventful period for Max Petroleum, from its establishment inApril 2005 through its listing on AIM and establishment of offices in London andKazakhstan." "The Company has an asset base which offers near term production through there-entry of existing wells and both low risk and high impact exploration fromshallow and deep structures. The base established in 2005 sets up this year tobe an extremely exciting year for Max Petroleum." 31 March 2006 Enquiries: Max Petroleum PLC Steve Kappelle T: +44 (0)20 7355 9590 Chief Executive Officer Pelham Public Relations Charles Vivian T: +44 (0)20 7743 6672 E : [email protected] Alisdair Haythornthwaite T : +44 (0) 20 7743 6676 E: [email protected] Chairman's statement Dear Shareholders, This first financial period to 31 December 2005, saw the Company attain a stockmarket listing and complete the strategic acquisitions of the A&E and EastAlibek oil exploration blocks in the Republic of Kazakhstan. On 27 October 2005 the Company achieved an important milestone, listing on theAIM Market of the London Stock Exchange. On Admission Max Petroleum Plc raised£25.87million before expenses by way of a placing of 73,920,000 newshares at 35p to fund the acquisitions and working capital. On 28 December 2005the Company placed a further 37,650,000 new shares with institutional investorsat 100p, conditional on the acquisition completed in January 2006. Financial Statements The Company is publishing its Unaudited Interim Consolidated FinancialStatements for the period from formation on 8 April 2005 to 31 December 2005.The statements reflect the assets acquired and expenditure incurred in theformation and structuring of the Max Petroleum Plc and its subsidiaries, theCompany's Admission to AIM and development of operational resources. Post Balance Sheet Event In 12 January 2006 the Company acquired the Astrakhansky Exploration Contract inWestern Kazakhstan. This acquisition was funded by the institutional placingannounced on 28th December 2005. Max has paid consideration for the acquisition of US$43.5million plus the issueof 3,500,000 new shares in the Company and an option to subscribe 50,000,000 newordinary shares in the Company at a price of 100 pence per share to be exercisedwithin 3 years. Outlook The Company has established strong management and operational teams in Londonand Kazakhstan and looks forward to achieving near term production through there-entry of existing wells and both low risk and high impact exploration fromshallow and deep structures. The base established in 2005 sets up the 2006calendar year to be an extremely exciting time for Max Petroleum. In the short period since Admission to AIM Max Petroleum Plc has advancedtowards its objectives. The Board will report on material developments as andwhen they occur. I would like to thank, on your behalf, our nominated adviser, solicitors,accountants, and other advisers for their hard work and support during theperiod under review. Finally, on behalf of the Board, I would like to thank shareholders for thecontinual confidence they have placed in the Company. James A Jeffs Executive Chairman INDEPENDENT REVIEW REPORT TO MAX PETROLEUM PLC Introduction We have been instructed by the Company to review the financial information forthe period 8 April 2005 to 31 December 2005, set out on pages 5 to 11. We haveread the other information contained in the interim report and consideredwhether it contains any apparent misstatements or material inconsistencies withthe financial information. This report is made solely to the company having regard to guidance contained inBulletin 1994/4 'Review of interim financial information' issued by the AuditingPractices Board. To the fullest extent permitted by the law, we do not accept orassume responsibility to anyone other than the company, for our work, for thisreport, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved, by the directors. The ListingRules of the London Stock Exchange require that the accounting policies andpresentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with United Kingdom Auditing Standards and thereforeprovides a lower level of assurance than an audit. Accordingly, we do notexpress an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the period 8 April2005 to 31 December 2005. Sawin & EdwardsChartered Accountants15 Southampton PlaceWC1A 2AJ Date 31 March 2006 Max Petroleum Plc Unaudited Consolidated Profit and Loss Account For the Period 8 April 2005 to 31 December 2005 Notes £ 000's Turnover 30 Cost of sales 0 Gross profit 30 Other operating costs (516) Administration expenses (5,879) Exceptional costs 2 (803) Operating loss (7,168) Interest received 55 Loss on ordinary activities before taxation (7,113) Taxation 3 0 Loss on ordinary activities after taxation (7,113) Minority Interests 130 Loss for the period (6,983) Loss per share 4 (5.48)p Max Petroleum Plc Unaudited Consolidated Balance Sheet As at 31 December 2005 £ 000's NotesFixed AssetsIntangible Assets 5 20,113Tangible Assets 64 20,177 Current AssetsStocks 3Debtors 6 3,406Cash held in escrow 4,302Cash held at bank and in hand 3,681 11,392 Creditors: Amounts falling due within 1 year (381) Net Current Assets 11,011 Total Assets less Current Liabilities 31,188 Capital and Reserves Ordinary Share Capital 7 26Deferred Share Capital 7 4,235Share Premium Account 8 34,038Profit and Loss (6,983)Minority Interest (128) 31,188 Max Petroleum Plc Unaudited Consolidated Cashflow For the Period 8 April 2005 to 31 December 2005 Reconciliation of operating loss to net cash (outflow) from operatingactivities £000's Operating loss (7,168)Increase in stocks (3)Increase In debtors (3,406)Increase in creditors 381Amortisation 874 Net cash outflow from operating activities (9,322) Cash Flow Statement Net cash outflow from operating activities (9,322) Returns on investments and servicing of financeInterest received 55 Capital expenditure and financial InvestmentPurchase of intangibles fixed assets (20,987)Purchase of tangible fixed assets (64)Net cash outflow for capital expenditure and (21,051)financial investment FinancingProceeds from share issues 38,301 Increase in cash 7,983 Max Petroleum Plc Notes to the Unaudited Accounts For the Period 8 April 2005 to 31 December 2005 1 Accounting policies Basis of Preparation The interim results have been prepared under the historical cost convention, are unaudited and do not constitute statutory accounts in accordance with Section 240 of the Companies Act 1985. Depreciation Depreciation has been provided for so as to write off the cost of an asset, less its estimated residual value, over its useful economic life. Licenses are being written off over the unexpired period of the license. Tangible Fixed Asset-Office Equipment 3 years straight line Intangible Fixed Assets-Licences & Exploration 4 years straight line Intangible Fixed Assets The accounts have been prepared using the Full Cost method of accounting for exploration and development expenditure in accordance with the UK SORP Accounting for Oil and Gas Exploration, Development, Production and Decommissioning Activities. Foreign Currencies Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. The results of overseas subsidiaries are translated at the rate of exchange ruling at the balance sheet date. Turnover Turnover shown in the profit and loss account represents work done in the period. 2 Exceptional item The Company settled litigation immediately prior to Admission with a settlement on the claimants of US$500,000 cash and the issue of 1,500,000 ordinary shares valued at 35p (the Admission price). 3 Taxation No provision for corporation tax has been provided for, due to losses incurred in the period. 4 Loss per share Loss per ordinary share (5.48)p The loss per share has been calculated on the net basis on the loss for the period after taxation of £(7,113,000) using the weighted average number of shares in issue of 129,772,532. 5 Fixed Assets Licences Exploration Total Intangible assets Expenditure £ 000's £ 000's £ 000's Cost Additions 18,874 2,113 20,987 Amortisation Charge for period (786) (88) (874) Net Book value 18,088 2,025 20,113 Intangible Fixed Assets - Licenses, represents exploration license acquisitions at cost. 6 Included in debtors are Deferred Settlement share subscriptions of £2,100,000, of which £2,100,000 has been received after the period end. 7 Authorised Share Capital Number £ £ 000's Ordinary shares of 0.01p 400,000,000 0.0001 40 Deferred shares of 14.99p 400,000,000 0.1499 59,960 Issued Share Capital Number £ £ 000's Ordinary shares 261,790,300 0.0001 26 Deferred shares 28,253,329 0.1499 4,235 On incorporation (8 April 2005), the Company issued 100 £1 Ordinary shares at par for aconsideration of £100. On 13 April 2005 the Company issued 50 £1 Ordinary shares at par for a considerationof £50. On 13 April 2005 the Ordinary shares of £1 were converted into Ordinary shares of15p on the basis of 100 15p Ordinary shares for every 15 £1 Ordinary shares. On 13 April 2005 the authorised share capital was increased from £10,000 to £30,000,000. On 13 April 2005 the Company issued 9,998,997 Ordinary 15p shares at par for aconsideration of £1,499,850. On 22 April the authorised share capital was increased from £30,000,000 to £60,000,000. On 22 April 2005 the company issued 2,333,332 Ordinary 15p shares at par for aconsideration of £349,999. Between the period from 12 May 2005 to 17 June 2005, the Company issued15,920,000 15p shares at 25p per share for a consideration of £3,980,000 resultingin a premium of £1,592,000. On 4 August 2005 the Ordinary shares of 15p were converted into Ordinary shares of0.01p and Deferred Shares of 14.99p on the basis of 1 Ordinary shares of 0.01p and 1Deferred Share for every 1 Ordinary share of 15p. On 5 August 2005 the Company issued 23,467,000 Ordinary 0.01p shares at 25pfor a consideration of £5,866,750 resulting in a premium of £5,864,403. On 5 August 2005 the Company issued 134,100,000 Ordinary 0.01p shares at par asconsideration under terms of Sale and Purchase Agreements of £13,410. On 28 October 2005 the Company issued 73,920,000 Ordinary 0.01p shares at 35p for aconsideration of £25,872,000 resulting in a premium of £25,864,608. On 28 October 2005 the Company issued 1,500,000 Ordinary 0.01p shares at 35pin settlement of litigation for a consideration of £525,000 resulting in a premium of£524,850. Between the period 15 November 2005 and 30 December 2005 the Company issued550,000 Ordinary 0.01p shares at 35p on exercise of share options for a considerationof £192,500 resulting in a premium of £192,445. Post Balance Sheet Share Issue:On 6 January 2006 the Company issued 37,650,000 Ordinary 0.01p shares at 100pfor a consideration of £37,650,000 resulting in a premium of £37,646,235. 8 Share Premium £ 000's Premium on shares issued in the period 34,038 9 Post Balance Sheet Events In January 2006 the Company acquired the Astrakhansky Exploration Contract from Kazgas Ltd as referred to in the Chairman's Statement. This acquisition was financed by the institutional placing detailed in Note 7. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MXP.L