22nd Nov 2007 10:55
Rockhopper Exploration plc22 November 2007 Press ReleaseFor Immediate Release: 22 November 2007 Rockhopper Exploration ("Rockhopper" or the "Company") The RNS announcement (number 2412I) issued earlier today contained incorrectloss per share figures in the text of the announcement. The figures quoted inthe text were a loss per share of 96 cents for 2007 and 95 cents for 2006. Thecorrect figures should have been a loss per share of 0.96 cents for 2007 and0.95 cents for 2006. All other figures are unchanged and a revised statement isset out in full below. Interim results for the six months ended 30 September 2007 Rockhopper Exploration plc (AIM:RKH), the North Falkland Basin oil and gasexploration company, today announces its interim results for the six monthsended 30 September 2007. Highlights €3D seismic processing completed •Initial review shows prospects •Technical work advancing •Environmental impact assessment started Commenting on the interpretation work carried out during the period, ManagingDirector Sam Moody said: "An initial review of the 3D seismic, which covers some 850km2, reveals thatboth fan shaped amplitude anomalies and structural closures can clearly be seen.These will add to our existing prospect and lead inventory which currentlyconsists of a number of targets in PL023 and PL024 totalling 2.5 billion barrelsof recoverable oil." For further information, please contact: Rockhopper Exploration plc www.rockhopperexploration.co.ukSam Moody - Managing Director 01722 414 419 Aquila Financial Ltd www.aquila-financial.comPeter Reilly 020 7202 2601Yvonne Fraser 020 7202 2609 Landsbanki Securities (UK) Limited - Corporate FinanceTom Hulme 020 7426 9000 Notes to editors www.rockhopperexploration.co.uk The Rockhopper Group started trading in February 2004 to invest in and carry outan offshore oil exploration programme to the north of the Falkland Islands. TheGroup, floated on AIM in August 2005, is currently the largest licence holder inthe North Falkland Basin and has a 100 per cent. interest in four offshoreproduction licences which cover approximately 5,800 sq. km. These licences havebeen granted by the Falkland Islands government. Chairman's statement During the six months ending 30th September 2007 we received the fully processed3D seismic data volume from CGG Veritas. This delivery of processed data, thelargest and most modern 3D undertaken to date in the Falklands, representscompletion of the data acquisition on our operated acreage set out at the timeof the IPO in August 2005. We have already identified targets in PL023 and PL024 on 2D and CSEM giving atotal potential figure of 2.5 billion barrels recoverable. We have significantlyreduced the risk associated with exploring in PL023 and PL024, found a number oflarge prospects and leads and created an increased expected monetary value as aresult. Initial interpretation of the 3D seismic data in licences PL032 and PL033 ishugely encouraging and will add to our prospect and lead inventory while alsofurther de-risking the acreage. The fans identified near the Shell wells on the3D have the potential to become one of the largest targets in our portfolio. While oil prices remain high, the market for semi-submersible rigs of the typerequired in the North Falkland Basin has eased with a number of suitable unitsbecoming available. While these units remain expensive, that cost can besignificantly reduced if the mobilisation and demobilisation can be shared withother operators. At the same time, the market for farm outs is also improving and we have nowbeen asked to present to a number of large oil companies. We will be in a position to begin that process in earnest once we complete theinterpretation of our data which will happen later this year. We are alsokeeping all other funding options open. As part of the review undertaken during the conversion to IFRS we have changedourpresentational currency to US Dollars. This better reflects both the industryand economic environment in which we operate. Dr Pierre JungelsChairman Managing Director's review With the delivery of the final processed 3D seismic data volume from CGG Veritaswe are able to take an important step forward in our technical work programme asset out at the time of the IPO. An initial review of the 3D seismic, which covers some 850km2, reveals that bothfan shaped amplitude anomalies and structural closures can clearly be seen.These will add to our existing prospect and lead inventory which currentlyconsists of a number of targets in PL023 and PL024 totalling 2.5 billion barrelsof recoverable oil. The 3D was acquired over licences PL032 and PL033 where Shell drilled two wellsduring 1998, one of which recovered live oil to the surface. Shell had alsocollected a small 3D programme (300km2) over that acreage during 1997. We havemerged our 3D with the previous Shell 3D to give us a total 3D coverage ofalmost 900km2, the equivalent to four North Sea blocks. In addition to interpreting the 3D seismic, we are undertaking additionaltechnical workdesigned both to further reduce the risk associated with our acreage and to helpus to obtain maximum value for shareholders in any farm out. The rig market is easier than twelve months ago and we are also seeing signs ofan improvement in the farm out market with a number of companies asking us topresent to them. Since we were admitted to trading on AIM in 2005 we have collected over 900km 2Dseismic in licences PL023 and PL024 which has allowed us to map prospects andleads with a total P50 of 2.5 billion barrels of recoverable oil. We have collected four CSEM lines in licences PL023 and PL024 with positiveoutcomes on prospects Ernest and Dolphin. Once we complete the interpretation of the 3D seismic in licences PL032 andPL033 we will update our prospect and lead inventory, rank our targets to decidedrilling locations and then carefully consider our options in terms of financingour drilling programme. Samuel MoodyManaging Director Financial review for the first half of the financial year The group has declared a loss for the six month period to 30 September 2007 of$725k ($681k: 2006) which equates to a loss per share of 0.96 cents (0.95 cents:2006). The loss has increased over the comparative period primarily as afunction of lower investment income earned, offset to a degree by lower chargesfor share based payment and foreign exchange movement. Investment income for the period fell to $160k ($502k: 2006) despite risinginterest rates in both the UK and the USA. The reduction is due to the reducingcash balances held as a result of the 3D work undertaken during the second halfof last year. However, as a percentage the group enjoyed a better return on thefunds it did hold of 5.75% for the current period against 4.88% for the priorperiod. Administrative expenses were $761k against $725k for the comparative period, theapparent increase being due to the weakening of the US$. Expenses are almostexclusively incurred in GB£ but being presented in US$ means they are influencedby exchange rate movements. Translating expenses back into GB£ results in acharge of £381k for the current period against £394k for the comparative period.The lower actual expenses were the result of a lower charge in respect ofexecutive bonuses and lower professional fees incurred. The share based expense of $117k compares to $223k for the previous period. Thelower charge reflects the first tranche of options that have now vested. Group net assets have reduced by $320k since the year ended 31 March 2007 with aloss of $725k for the period offset by the movement of the share based charge of$117k to reserves and currency gains on shareholders' equity brought forward of$288k. Financial outlook for the second half of the financial year Whilst the base rate in the UK and the federal fund rate in the USA both roseduring the six months ended 30 September 2007, the recent concerns as to thestrength of both economies saw the federal fund rate cut by 50 basis points withfurther near term cuts possible in both the UK and USA. Cuts in either rate willreduce the group's future investment income on the current account as the groupfunds earn a fixed margin relative to the UK base rate and US federal fundsrate. In anticipation of falling rates £1,750k of the group's cash was placed onfixed deposit prior to the period end, at up to 6%, to mitigate the immediateeffect of rate cuts. However, all deposits are for less than 90 days asliquidity remains the key group priority and so if rates do indeed fall theywill have an effect once the fixed deposits expire. Overheads are expected to remain stable for the second half of the year andshould be less than the first half year as the entire charge for the annualbonuses is taken in the first six months. Possible areas of increasedexpenditure would be travel costs and professional fees. Unless the underlying assumptions change, the charge for share basedremuneration will continue at a consistent level until the six month periodending 30 September 2010 when it will be fully expensed. Cash balances at 30 September 2007 stood at $4,897k and cash requirements fromexploration expenditure over the coming six months are expected to be modestwith the emphasis on interpretation of the 3D data acquired during the yearended 31 March 2007. Of the total cash balances, $862k was held in US$ and soshould insulate the group for a time against possible currency fluctuations,particularly a strengthening of the US$. Conversion to International Financial Reporting Standards ("IFRS")This is the first time the group has had to report under IFRS, an obligationplaced on it by its admission to trading on AIM. Whilst there have been a numberof presentational changes in this report and a greater level of disclosure andanalysis is anticipated for the year end report, there has been no impact to theactual results and the comparatives contained within this report. Consequently,no IFRS reconciliations have been presented. Change of presentational currency from GB£ to US$As part of the review undertaken during the conversion to IFRS, the group alsotook the opportunity to review its presentational currency and concluded that the US$ was now more suitable given that it better reflects the economic environment in which the group operates. The most notable feature of this conversion is to emphasise the benefit thegroup has enjoyed by being capitalised and holding funds in GB£ over a periodwhen the US$ has weakened considerably. At the effective date of transition toIFRS, 1 April 2006, the US$ was trading at 1.74 to the GB£ as opposed to therate of 2.02 used for this report. However, whilst the group presents itsresults in US$, the functional currency of the parent company remains GB£ and sochanges to shareholders' equity, where the impact is greatest, are takenstraight to reserves rather than through the income statement. IAS 21: The effects of changes in foreign exchange rates requires that reserveelements of shareholders' equity are reconverted at the end of each period andthe currency translation differences reflected within that reserve. However, inthe case of share capital and share premium these are fixed at their historicrate, at the date of issue or 1.74 if issued prior to the effective date oftransition to IFRS, and the difference taken to a currency translation reservethat would unwind were the US$ to strengthen against GB£. The currency translation reserve also holds the differences that arise fromtranslating the capitalised amounts in respect of exploration licenses. Whilst previously the expenditure on exploration licenses was fixed at the exchange rate prevailing at the time and carried forward as a converted GB£ amount, this exaggerates the rate of exchange impact when translated directly into US$. Accordingly, the values presented in the balance sheet have been adjusted so that they reflect the actual currency in which they were spent. Peter Dixon-Clarke Consolidated income statement - unauditedfor the period ended 30 September 2007 6 months ended Restated* Restated* 30 September 6 months ended Year ended 31 2007 30 September March 2007 2006 Unaudited Unaudited Unaudited Notes $'000 $'000 $'000RevenueInvestment income 160 502 852 Total revenue 160 502 852 ExpensesAdministrative expenses 761 725 1,459Charge for share based remuneration 117 223 440Foreign exchange movement 7 235 367Total expenses 885 1,183 2,266 Loss before tax (725) (681) (1,414) Income tax expense - - - Net loss after tax arising (725) (681) (1,414)from continuing activitiesand attributable to equityholders of the parentcompany Loss per sharebasic and diluted - cents 2 (0.96) (0.95) (1.97) Weighted average number of shares:basic and diluted 75,663,490 71,800,154 71,817,756 * The restatement applies solely to the decision to change the presentationalcurrency from that of GB£ to US$ and not the transition to IFRS. The results for the period relate wholly to continuing operations. Consolidated balance sheet - unauditedas at 30 September 2007 As at 30 Restated * As Restated * As September 2007 at 30 September at 31 March 2006 2007 Unaudited Unaudited Unaudited $'000 $'000 $'000AssetsCapitalised explorationexpenditure 25,442 5,163 24,946Office equipment 13 24 16Receivables 19 9 74Cash and cash equivalents 4,897 22,326 6,341 Total assets 30,371 27,522 31,377 Liabilities Payables 868 125 1,554 Total liabilities 868 125 1,554 EquityShare capital 1,325 1,254 1,325Share premium 28,403 26,008 28,403Currency translationreserve 2,820 1,930 2,460Reserve for share basedremuneration 1,267 879 1,115Other reserves (283) (262) (274)Retained losses (4,029) (2,412) (3,206)Total equity attributableto group shareholders 29,503 27,397 29,823 Total liabilitiesand equity 30,371 27,522 31,377 * The restatement applies solely to the decision to change the presentationalcurrency from that of GB£ to US$ and not the transition to IFRS. These interim results were approved by the directors and authorised for issue on21 November 2007 and are signed on their behalf by: Samuel Moody Peter Dixon-Clarke ACAManaging Director Finance Director Consolidated statement of changes in equity - unauditedfor the period ended 30 September 2007 6 months ended Restated* Restated* 30 September 6 months ended Year ended 31 2007 30 September March 2007 2006 Unaudited Unaudited Unaudited $'000 $'000 $'000Share capitalOpening balance 1,325 1,249 1,249Options exercised - 5 5New shares issued - - 71Closing balance 1,325 1,254 1,325 Share premiumOpening balance 28,403 25,959 25,959Premium on options exercised - 49 49Premium on new shares issued - - 2,532Issues costs - - (137)Closing balance 28,403 26,008 28,403 Currency translation reserveOpening balance 2,460 9 9Movement on capitalisedexploration expenditure (654) (114) (994)Movement on share capital 45 94 159Movement on share premuim 969 1,941 3,286Closing balance 2,820 1,930 2,460 Share based remunerationOpening balance 1,115 607 607Share based expense chargefor the period 117 223 440Transferred to retainedlosses in respect of options - - (24)exercised in the yearCurrency translation difference 35 49 92Closing balance 1,267 879 1,115 Other reservesOpening balance (274) (244) (244)Currency translation difference (9) (18) (30)Closing balance (283) (262) (274) Retained lossesOpening balance (3,206) (1,611) (1,611)Loss for the period (725) (681) (1,414)Transferred from sharebased remuneration reserve - - 24Currency translation difference (98) (120) (205)Closing balance (4,029) (2,412) (3,206) Equity shareholders' funds 29,503 27,397 29,823 * The restatement applies solely to the decision to change the presentationalcurrency from that of GB£ to US$ and not the transition to IFRS. Consolidated cash flow statement - unauditedfor the period ended 30 September 2007 6 months ended Restated* Restated* 30 September 6 months ended Year ended 31 2007 30 September March 2007 2006 Unaudited Unaudited Unaudited $'000 $'000 $'000Cash flows from operating activities Net (loss) (725) (681) (1,414)Adjustments to reconcile net incometo cash provided by operating activitiesDepreciation 7 7 17Share based remuneration expense 117 223 440Foreign exchange movement 7 235 367Changes in:Receivables 55 8 (57)Trade payables (201) 22 109Cash (utilised) by operating activities (740) (186) (538) Cash (outflow) for capital expenditureCapitalised exploration expenditure (801) (583) (18,709)Office equipment (4) (10) (10)Cash flows (used) for capital expenditure (805) (593) (18,719) Cash inflow from financing activitiesOptions exercised - 54 54Issue of share capital - - 2,603Share issue costs - - (137)Cash inflow from financing activities - 54 2,520Net cash (outflow) (1,545) (725) (16,737)Net foreign exchange differences 101 1,379 1,406Cash and cash equivalentsbrought forward 6,341 21,672 21,672 Cash and cash equivalentscarried forward 4,897 22,326 6,341 * The restatement applies solely to the decision to change the presentationalcurrency from that of GB£ to US$ and not the transition to IFRS. Notes to the consolidated interim results - unaudited 1 Accounting policies1.1 Group and its operationsRockhopper Exploration plc ('the company'), a public limited companyincorporated and domiciled in the United Kingdom ('UK'), together with itssubsidiaries (collectively, 'the group') holds certain licences granted in 2004and 2005 for the exploration of oil and gas in the North Falkland Basin. Theregistered office of the Company is Hilltop Park, Devizes Road, Salisbury, SP34UF. 1.2 Basis of preparationFrom 1 January 2007 all companies on the Alternative Investment Market ("AIM")are required to prepare their consolidated financial statements using standardsissued by the International Accounting Standards Board ("IASB") as adopted bythe European Union. The effective date of transition to IFRS is therefore 1April 2006. The results upon which this announcement has been based wereprepared using the accounting policies set out below. The interim reults are reviewed but not audited and do not constitute statutoryaccounts within the meaning of section 240 of the Companies Act 1985. Thefigures for the year ended 31 March 2007 included in the interim statement havebeen extracted from the UK GAAP financial statements and restated into IFRS. TheUK GAAP financial statements for the year ended 31 March 2007 have been reportedon by the company's auditor and have been delivered to the registrar ofcompanies. The auditor's report on the UK GAAP financial statements for the yearended 31 March 2007 was unqualified and did not contain any statement undersection 237(2) or (3) of the Companies Act 1985. This interim report is not required to be prepared in accordance with IAS 34:Interim financial reporting and therefore does not comply with IFRS. The IFRSaccounting policies adopted are the ones that will apply for the year ended 31March 2008. The Company has elected to take the exemption offered within IFRS1: First timeadoption of International Financial Reporting Standards in relation to businesscombinations. Items included in the financial statements of each of the group's entities aremeasured in the currency of the primary economic environment in which thatentity operates (the "functional currency"). The consolidated financialstatements are stated in US dollars. The functional and presentation currency ofthe subsidiaries, where the licences are held, is US dollars whilst thefunctional currency of the holding company is £ sterling. All values are roundedto the nearest thousand dollars ($'000), also stated as 'k', except whenotherwise indicated. 1.3 Significant accounting policiesBasis of accountingThe group has identified the accounting policies that are most significant toits business operations and the understanding of its results. These accountingpolicies are those which involve the most complex or subjective decisions orassessments, and relate to the capitalisation of intangible assets. In eachcase, the determination of these is fundamental to the financial results andposition and requires management to make complex judgments based on informationand data that may change in future periods. Since these involve the use of assumptions and subjective judgments as to futureevents and are subject to change, the use of different assumptions or data couldproduce materially different results. The measurement basis that has been applied in preparing the interim results ishistorical cost with the exception of financial assets which are held at fairvalue. 2. Basic and diluted loss per share 6 months ended 6 months ended Year ended 31 30 September 30 September March 2007 2007 2006 Number Number Number Shares in issue brought forward 75,663,305 71,774,605 71,774,605Shares issued during the period- Issued on 17 August 2006 - 225,000 225,000- Issued on 22 August 2006 - 75,000 75,000- Issued on 5 March 2007 - - 3,588,700- Issued on 13 September 2007 1,980 - -Shares in issue carried forward 75,665,285 72,074,605 75,663,305Weighted average shares in issue 75,663,490 71,800,154 71,817,756 $'000 $'000 $'000Net (loss) after tax ( 725) (681) (1.414)Basic and diluted net (loss) pershare - cents (0.96) (0.95) (1.97) The calculation of the basic loss per share is based upon the loss for theperiod and the weighted average shares in issue. As the group is reporting aloss for all periods then in accordance with IAS 33 the share options are notconsidered dilutive because the exercise of the share options would have theeffect of reducing the loss per share. 3 Copies of the interim reportCopies of the interim report will be dispatched to shareholders shortly and willalso be posted to the Company's website www.rockhopperexploration.co.uk . This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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