28th Nov 2005 07:01
Forum Energy Plc28 November 2005 28 November 2005 Forum Energy Plc ('Forum' or 'the Company') Preliminary results for the six months to 30 September 2005 Forum Energy Plc, the UK-based energy group with a portfolio of oil, gas andcoal assets in the Philippines, today announces its preliminary results for thesix months to 30 September 2005. Highlights of the year include: • Raised £3.4 million in a pre-IPO placement in May 2005 • Admitted to AIM in August 2005 raising £11.0 million • First revenues from gas and coal developments in the Philippines expected in the first half of 2006 • Completed 2D seismic survey in Tanon Straits, SC40 • Completed 3D seismic survey over the Sampaguita Gas Field, GSEC101 • Completed feasibility study for the Libertad Gas Field development, SC40 Commenting, David Robinson, Chief Executive, said: "We are very pleased with the progress that Forum has made since its inceptionearlier this year, through the acquisition of the Philippine oil & gas and coalassets of Sterling Energy plc in the UK and FEC Resources Inc. in Canada. Welook forward to many positive developments during the months ahead. " For further information please contact: David Robinson, Chief Executive, Forum Energy Plc: +44 (0) 1932 445 346 Adam Westcott, Noble & Company Limited: +44 (0) 131 225 9677 Ian Foster, First City Financial Public Relations: +44 (0) 20 7436 7486 +44 (0) 7739 185 050 Or visit the Company's website: www.forumenergyplc.com Chairman's Statement: Dear Shareholder: Since its establishment in April 2005 through the merger of the Philippine oil &gas and coal interests of FEC Resources Inc. of Canada and of Sterling EnergyPlc of the UK, Forum Energy Plc has made considerable progress in advancing theexploration, appraisal and development of its portfolio of assets. It is theonly AIM-listed international E&P company that is currently focused exclusivelyon the Philippines. Financial Forum recorded a loss of US$0.571 million for the interim period ended September30, 2005. This loss was primarily attributable to expenses associated with theadministration of the company in the period since formation whilst the IPO wasbeing completed. . The company successfully raised £3.4 million (pre-expenses) in a pre-IPOplacement at 100p per share in May 2005, followed by an IPO placement of £11.0million (pre-expenses) at 112p per share and admission to AIM in August 2005.Forum's working capital position as of September 30, 2005, was US$16.4 million The Board of Directors has approved the 2005 and 2006 capital and operatingbudgets for Forum, which include development of the Libertad Gas Field and theCentral and Southern Cebu coal operating contracts (COCs), all of which areexpected to become revenue generating during the first half of 2006. General Survey and Exploration Contract 101 (GSEC101) In August, Forum completed a key 3D seismic survey across the major Sampaguitagas discovery, offshore the Philippines. The survey was carried out over anarea of 248 square kilometres by DGC Asia Pacific Ltd, part of Veritas. The datais currently being processed in the UK by Veritas, and is expected to becompleted by the end of the first quarter of 2006. The processed data will beinterpreted at Forum's office in the Philippines. Interpretation and analysis of the 3D seismic data will provide more informationon the commercial potential of this highly promising discovery, and helpidentify the best location for a possible appraisal well which is targeted to bedrilled over the next 18 months, subject to rig availability and, if deemedappropriate, finding a farm-in partner. The Sampaguita Gas Field is located within license area GSEC 101 west of PalawanIsland in the South China Sea; Forum holds 100% of this under-explored acreage,which covers 10,630 square kilometres and contains at least eight otherundrilled prospects and leads besides Sampaguita. Sampaguita lies 250 kilometres southwest of the world-class Malampaya Gas Field,where operator Shell has installed extensive production facilities and pipelineinfrastructure that supplies gas to three Philippine power plants. Gas hasalready been tested from Sampaguita during the 1970s and 1980s. A recentindependent assessment by petroleum consultants PGS Reservoir Ltd estimated thatthe field could contain potential recoverable gas reserves of up to 2.3 trillioncubic feet. Service Contract 40 (SC40) Forum completed an offshore 2D seismic acquisition programme in the TanonStrait, west of Cebu Island within SC40, in June 2005. The data acquired isbeing processed by Spectrum Energy (UK), along with 1,000 kilometres of vintage2D data from the region. The processed lines will be integrated with thereprocessed vintage lines and interpreted in-house in the Philippines.Interpretation is forecast to be completed during the second quarter of 2006. The seismic survey, completed by the Veritas Searcher, acquired 310 kilometresof new 2D data in licence SC40, where Forum holds a 67% interest. Structureswithin the area covered by this survey, including the Central Tanon and JibitnilIsland prospects, have combined potential reserves of 350 million barrels of oilequivalent according to estimates by PGS Reservoir Ltd. The new seismic lines have been acquired in order to improve the mapping of theCentral Tanon and Jibitnil Island prospects. The seismic data will be tied toold wells such as Bangus and Anapog (for Central Tanon) and Bakyad (for JibitnilIsland) for better well-to-seismic correlation. The new seismic lines acquiredbetween Jibitnil and Cebu Islands will help define more precisely the JibitnilIsland structure which is cut by several faults. In addition to seismic data,the survey included the acquisition of marine gravity and magnetic data, whichis now being processed by Ark Geophysics Ltd (UK). Elsewhere within SC40, first gas production is expected during the first half of2006 from the onshore Libertad Gas Field, to supply a 2 MW gas-to-electricityproject. The Philippine Department of Energy is expected to formally announce aDeclaration of Commerciality for the Libertad Gas Field shortly after whichdevelopment of the field will begin, subject to satisfactory commercial termsand approvals. In 2003, a gas and oil discovery was made within SC40 at the northern tip of theisland of Cebu, in the Maya region. Workover and testing of one of thediscovery wells, F2X, is planned to begin in the first quarter of 2006, once thenecessary materials have been delivered and the scheduled maintenance andrefurbishment of the company's 66.7%-owned Hycalog drilling rig has beencompleted. The open-hole section within the F2X well will be cleaned out and a liner run toprepare the well for testing through a completion string. If the well flowsoil, it will continue into an extended testing period. If it produces gas, itwill be shut-in and considered for future production as a gas-to-electricityproject, similar to the Libertad Gas Field development. Coal Operating Contracts Forum's 66.7%-owned coal operating contracts (COCs) in Central and SouthernCebu, COC 131 and COC 132, are currently being appraised and developed inaccordance with the company's commitments to the Philippine Department ofEnergy. These commitments are due to be fulfilled during the first quarter of2006, at which time commercial production is expected to begin. Some incidentalproduction is likely to occur prior to that from the driving of shafts and otherdevelopment activities. CSA Group has produced a Coal Competent Person's Report covering COC 131 and COC132. Proven and probable coal reserves are estimated to be 1.4 million metrictonnes and 3.5 million metric tonnes respectively. New Ventures In May, Forum entered into an agreement with Basic Consolidated, Inc. in thePhilippines whereby the parties agreed to work under an exclusivity periodtowards finalizing the purchase by Forum of Basic's petroleum interests in thePhilippines. The exclusivity period was subsequently extended to 31 January2006 while Forum continues the technical due diligence of Basic's petroleuminterests. This potential acquisition is consistent with the company's strategy toconsolidate its position in the country by acquiring further oil, gas and coalassets, and if successful, would add significant value to Forum's portfolio. Inthis regard, the company is also in discussions with a number of other groupsthat own oil, gas and coal assets in the Philippines. Additionally, in June 2005, Forum loaned $600,000 to MG Mining and EnergyCorporation in the Philippines, as part of an option agreement to potentiallyacquire some or all of MG's coal mining assets in the country. To date, Forumand MG have been unable to agree to the terms of an acquisition, and it isuncertain whether a transaction will ultimately be completed between theparties. The $600,000 loan plus interest is due and payable as of September 30,2006 or earlier in certain circumstances, and security is provided by MG's coaloperating contract which is located next to Forum's Southern Cebu COC. Outlook Forum Energy is well-positioned to move forward with the exploration, appraisal,and development of its existing portfolio of oil, gas and coal interests in thePhilippines, as well as with the acquisition of additional interests in thecountry. The company is in a strong financial position, which should be furtherimproved as first revenues from coal production and from the Libertad Gas Fieldbegin as expected in the first half of 2006. In addition to the start of production from Libertad and its coal operatingcontracts, Forum expects to be in a position to report to its shareholders onother significant developments in the coming months. These include the resultsof interpretation of the 3D seismic acquisition over the Sampaguita Gas Fieldand of the 2D seismic covering the Tanon Straits prospects off Cebu; the resultsof the workover and testing of the F2X well in the Maya region on Cebu; thepossible acquisition of the petroleum interests of Basic, and other promisingopportunities that are currently being evaluated and pursued. We believe the future looks extremely positive for Forum and its shareholders. Alan B. Henderson Chairman David R. Robinson President and Chief Executive Officer Forum Energy Plc Group Consolidated Statement of Loss for the Period April 1st 2005 to September30th 2005 (Unaudited) For the period From April 1st 2005 to September 30th 2005 US$000's Unaudited Operating Expenses (57)Administrative Expenses (569) ________Operating Loss before Financing Expenses (626) Financial Income 125Financial Expenses (70) _______Loss before Tax (571) _______Income Tax Expense - _______Loss after Tax (571) _______ Attributable to:Equity Holders of the Parent (571)Minority Interest 0 _______Loss for period (571) _______ ______________________________________________________________________ Loss per Ordinary Share (cents) Basic: (0.04) _______ ______________________________________________________________________ There is no recognized income or expenses other than those in the loss account. Forum Energy Plc Group Consolidated Balance sheet (Unaudited) As at September 30th 2005 US$000's Unaudited AssetsPlant, Property & Equipment (net of depreciation) 305Intangible Assets 32,889 _______Total Non-Current Assets 33,194 _______ Inventories 113Other Investments 79Trade and Other Receivables 1,233Cash and Cash Equivalents 15,360 _______Total Current Assets 16,785 _______Total Assets 49,979 _______ EquityIssued share capital 4,886Share Premium 43,871Reserves 222Retained Earnings (571) _______Total Equity attributable to Equity Holders of the Parent 48,408 Minority Interest 1,181 _______Total Equity 49,589 _______ LiabilitiesProvisions 17 _______Total Non-Current Liabilities 17 _______ Trade and Other Payables 373 _______Total Current Liabilities 373 _______Total Liabilities 390 _______Total Equity and Liabilities 49,979 _______ Forum Energy Plc Group Consolidated Cash Flow Statement (Unaudited) For the period from April 1st 2005 to September 30th 2005 US$000's Unaudited Cash Flow from Operating ActivitiesCash Paid to Suppliers and Employees (572) _______Net Cash from Operating Activities (572) _______ Cash flows from Investing ActivitiesInterest Received 125Expenditure on Oil and Gas Exploration and Development (8,810)Purchase of Plant Property and Equipment (362)Purchase of Other Investment (80)Note Receivable (600) _______Net Cash from Investing (9,727) _______ Cash flows from Financing ActivitiesProceeds from issue of Share Capital (net of expenses) 25,595 _______ Net Increase/(Decrease) in Cash and Cash Equivalents 15,296 _______ Cash and Cash Equivalents as at April 1st 2005 0Effect of Exchange rate fluctuations on Cash Held 64 _______Cash and Cash Equivalents at September 30th 2005 15,360 _______ Forum Energy Plc Notes forming part of the financial statements for the period April 1st 2005 toSeptember 30th 2005 (Unaudited) 1 Basis of preparation The interim financial information has been prepared in accordance withInternational Financial Reporting standards (IFRS) and are neither audited norreviewed by the auditors for Forum Energy Plc. The consolidation of thesubsidiary Companies and acquisitions have been accounted using IFRSpronouncements and in particular IFRS 3. and 6. Forum Energy Plc (the "Company") was duly incorporated on April 1st, 2005. OnApril 22nd 2005 the Company acquired the license to explore and develop GSEC101in the Philippines and immediately commenced a 3-D seismic operation. On May18th 2005 the Company acquired 66.67% of Forum Exploration, Inc, a PhilippinesCompany with Service Contract 40 and COC131 and COC132, to explore and developthe coal, gas and oil assets in the Island of Cebu in the Philippines. MinorityInterest has been recognized through full consolidation of the Group's interestand reflecting the Minority 33.33% share in Forum Exploration, Inc. On May 18th2005 the Company raised approximately (?c=8356)3.4 million (pre-expense) in apre-IPO fund raising and subsequently an additional £11.0 million(pre-expense) in an IPO and admission to AIM on August 2nd 2005. 2. Financial Reporting Period The financial information for the Period April 1st 2005 to September 30th 2005is unaudited. In the opinion of the directors the financial information forthis period present fairly the financial position, results of operations andcash flows for the period in conformity with generally accepted accountingprinciples consistently applied and approved these accounts on November 25th2005, These are the first interims since incorporation of the Parent Company andtherefore no comparative figures are available. This interim financial statement does not constitute statutory accounts withinthe meaning of section 240 of the Companies Act 1985. 3. Loss per ordinary share The calculation of basic and diluted loss per ordinary share has been based onthe loss for the period of US$571,000 and 15,095,188 ordinary shares, being theaverage number of shares in issue for the period to September 30th 2005. Theactual number of shares in issue as at September 30th 2005 is 27,221,450. Inaddition 1,218,000 options have been issued to employees, directors and keypersons at the IPO price of £1.12 per share and will only be exercisable3 years after the date of issue. 4. Functional Currency All accounts have been prepared in US Dollars being the functional currency ofthe Group. 5. Additional Information Further copies of this interim statement are available from the CompanySecretary, Forum Energy Plc, 120 Bridge Road, Chertsey, Surrey KT16 8LA, UnitedKingdom, Tel: +(0)1932 445 344, Fax: +(0)1932 445 345, info@ forumenergyplc.com,or downloaded from the website: www.forumeneryplc.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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