26th Sep 2006 07:01
Aminex PLC26 September 2006 AMINEX PLC ("Aminex" or "the Company") Interim results for the six months ended 30 June 2006 Aminex, the oil and gas company listed on the London and Irish Stock Exchanges,today announces its preliminary results for the half year ended 30 June 2006. Highlights • Loss before tax for period of $1.63 million (2005: loss $1.9 million) • Placing of new shares amounting to net $5.1 million • At Nyuni new seismic acquired and large leads and prospects identified. Now moving towards next drilling phase • Good progress in Madagascar. • Egyptian Production Sharing Agreement finalised • Deep gas well drilled at South Weslaco, Texas and results anticipated in near future Brian Hall, Aminex's Chief Executive, commented: "Next year will see significant levels of activity for the Aminex Group asdrilling operations commence in a number of areas. Aminex has been busy puttingin place the components of an ambitious exploration programme supported bysteady development of producing assets in the USA. We are especially pleasedwith the acreage position we have built in East Africa, having established anumber of concessions on attractive terms ahead of a surge in interest in thisregion which is becoming a new focus of interest for the oil industry." 26 September 2006 Enquiries: Aminex PLC +44 (0) 20 7291 3100Brian Hall - Chief ExecutiveSimon Butterfield - Finance Director Pelham Public Relations +44 (0) 20 7743 6679Archie Berens OVERVIEW During the period under review the Aminex Group carried out workover operationsat Shoats Creek, Louisiana, acquired new seismic in Tanzania and Kenya,reprocessed existing seismic in North Korea, carried out gravity surveys inMadagascar and, since the period end, has drilled a deep gas well in Texas. Inearly June, an institutional share placing successfully raised approximately $5million to enable seismic and other pre-drilling work to be carried out with aview to an active drilling programme in 2007, plans for which are on track. FINANCIAL REVIEW Turnover at US$2.6 million is 105% ahead of the 2005 comparative period. Theincrease is due to both higher gas revenues in the USA and increased levels oftrading from the Group's oilfield services and supplies business. Oil productionwas similar for both periods. However, the Group achieved a higher average oilprice for the current period of $59.79 per barrel when compared with the averageoil price achieved for the first six months of 2005 of $46.03 per barrel. Gasproduction commenced in late December 2005 from the South Weslaco field and hascontinued throughout the period, whereas the Group only benefited from six weeksof gas production from its Alta Loma field following the re-commissioning ofBP's Texas City refinery. Gross profit for the period amounted to $0.76 million, an 84% improvement overthe $0.41 million gross profit for the first six months of 2005. After takinginto account administrative expenses of $2.28 million (2005: $2.21 million) anddepreciation and net finance costs of $111,000 (2005: $106,000), the resultingnet loss for the period amounted to $1.63 million, an improvement of $0.27million over the 2005 loss of $1.9 million. The increase in fixed assets since 31st December 2005 of $1.17 million relatesto expenditure on exploration activities in East Africa and North Korea as wellas on the Group's producing assets in the USA. Following a share placing whichraised net proceeds of $5.12 million, the cash balance at the end of thereporting period amounted to $5.96 million (31st December 2005: $3.9 million) OPERATIONS REVIEW Tanzania Aminex's efforts in Tanzania are being directed towards a four well drillingprogramme which it aims to conduct during 2007. This will involve two wells onthe Nyuni licence in the Rufiji Delta and two wells on the onshore/offshoreRuvuma licence which adjoins the border with Mozambique. At Nyuni a number oflarge leads and prospects have been either identified or better-defined throughan extensive seismic programme undertaken over the last twelve months. It islikely that one of the new Nyuni wells will be a close offset to the producingSongo Songo gas field which has now been successfully delivering gas into acommon user pipeline for two years. The second well will test one of severalpotentially large offlying prospects, developed using new seismic and currentlyunder evaluation. Preliminary negotiations are now ongoing with rig operatorsfor an appropriate drilling unit. At Ruvuma, where Hardman Resources Ltd. isearning a 50% interest through paying for an onshore seismic programme, welllocations have yet to be defined. An initial assessment of Ruvuma concludesthat this licence area contains several sizeable oil and gas prospects. The Nyuni partners are currently Ndovu Resources Ltd. (wholly-owned by AminexPLC) 84% and Bounty Oil & Gas NL (6%), with East Africa Exploration Ltd earninga 10% interest in the licence through financing a final $2 million seismicprogramme prior to drilling which is expected to be completed during the fourthquarter of this year. In 2005 Pan African Tanzania Ltd., ("PAT"), operator ofthe Songo Songo gas field and a subsidiary of East Coast Energy Ltd., acquiredseismic over the western part of the licence with a view to earning an option toparticipate in a subdivision of the Nyuni licence, subject to the TanzanianGovernment's agreement. Unfortunately it was not ultimately possible tosubdivide the licence as envisaged and additionally the terms for exercising theoption were not completed by PAT. Negotiations are continuing with PAT for itsparticipation in the greater Nyuni licence with a proportionally reducedinterest in the larger licence area. Aminex's exploration programme is movingahead in an expeditious manner and is not dependent on the outcome ofnegotiations with PAT. Madagascar Aminex and its 50-50 partner Mocoh Resources Ltd., operating through a jointcompany known as Amicoh Resources Ltd., have completed a gravity survey over the10,750 square kilometre onshore Manja concession, Block 3108, and arereprocessing approximately 2,000 line kilometres of 2D seismic acquired byprevious licensees Chevron and Amoco some years ago. The first year workprogramme will be completed on schedule and plans are in hand for new seismicacquisition in year 2. Meanwhile, a recent onshore licensing round inMadagascar attracted a high level of interest from a number of internationalcompanies offering high work commitments, including for open acreage directlyadjoining the Amicoh Resources licence. Madagascar has become a focus ofindustry interest over the last two years and Aminex is therefore pleased tohave acquired an excellent licence on favourable terms in late 2005. U.S.A. Aminex USA, Inc., a wholly-owned subsidiary, has interests in four principalproducing locations, being Alta Loma, Shoats Creek, South Weslaco and Somerset.Alta Loma produces from a single gas well which has been intermittentlyshut-in for some time now as a result of a major fire and explosion some monthsago at BP's Texas City Refinery which was the customer for its production.However, Texas City is now operational again and Aminex and partners areconsidering the construction of a new sales pipeline, to be operational thisyear, which would hook up to Texas City and allow greater gas volumes to beproduced than before. Next year a further well is contemplated at Alta Loma,probably in the first quarter. Aminex and partners have just drilled a thirdwell at South Weslaco in addition to two gas wells drilled in 2005 which are nowon production. The third well, which aims to test a deeper Lower Frio sand, hasnow been drilled and cased and the rig has left the location. Results of thiswell will be announced to shareholders once a completion rig has conducted aproduction test, expected in the near future. Remedial work and initialworkovers have been carried out at Shoats Creek, Louisiana, and facilitiesreconstructed and upgraded. Aminex believes that Shoats Creek has considerableunrealised potential which will be assessed by a 3D seismic survey to beconducted in the area by Forest Oil in the next few months at no cost to Aminex.With the benefit of this survey Aminex will be able to reassess the potentialof Shoats Creek. Somerset stripper production in south Texas benefits from highprices for heavy crude. A programme of upgrading has been carried out atSomerset, a number of old wells abandoned and a limited water flood is plannedto increase production. Kenya Aminex and partners Upstream Petroleum Services Ltd. and SomKen concluded aseismic survey and seabed coring exercise over the near shore areas of Kenyaoffshore blocks L9 and L10 earlier in the year under the terms of a TechnicalEvaluation Agreement. Negotiations are in progress to convert this acreage tofull Production Sharing Agreement ("PSA") status and shareholders will be keptadvised of progress. Woodside Petroleum and partners are thought to be planningan early well offshore Kenya in deep water which could be very significant forKenya's future oil and gas potential. North Korea In North Korea (the Democratic Peoples Republic of Korea or "DPRK") progress hasbeen slower than anticipated, mainly on account of a series of bureaucraticdelays. Aminex's area of concentration is currently the East Sea where a datagathering exercise is under way. It is likely that a new agreement will besigned some time during the remainder of this year which will facilitateaccelerated operations and Aminex has been assured that the timetable for the2005 PSA will be extended to enable commitments to be met in an orderly manner.Aminex considers the oil and gas potential of the DPRK to be very high, eventhough operations require both patience and perseverance. Aminex enjoysexcellent relations with its hosts in the DPRK. Egypt On 17th September 2006, as announced to shareholders, a licence for Block 2 inthe onshore West Esh el Mellahah area ("WEEM") was finalised in Cairo with theMinister of Petroleum at a formal ceremony. This marks the end of lengthynegotiations and the beginning of a first three year work programme, in whichthree wells are planned for 2007. The main prospects in Block 2 are alreadycovered by 3D seismic data which means that it will be possible to move straightinto the drilling phase. Aminex has an interest of 10% in WEEM and its share ofexploration costs will be carried through to first commercial production bypartners. WEEM is in a proven oil and gas area and close to major existingproduction in neighbouring WEEM Block 1. Aminex is reviewing furtherexploration opportunities in Egypt. STRATEGY & PROSPECTS Aminex has now developed a material portfolio of exploration assets on the EastAfrican margin, in Egypt and on the Korean peninsula, in addition to which itowns a small but well-run American producing operation. Aminex's strategy is tomove fast to acquire good acreage positions in areas which have not yet fullyattracted the attention of the industry and this strategy has already beenvindicated in Tanzania and Madagascar where interest is growing rapidly in theareas where Aminex already holds acreage. Most of the work carried out in 2006has been preparatory to a major drilling campaign which Aminex proposes tolaunch in 2007, involving two new wells on each of its Tanzanian licences, threewells in Egypt and two to three wells in the USA, including a major well at AltaLoma. Depending on the rate of progress, there is a further possibility ofdrilling in both Kenya and Madagascar. This is clearly an ambitious programmeand the precise timing of each well will depend on securing rigs and associatedequipment, the market for which is currently tight. Success in any of thesewells could transform Aminex. 26 September 2006 CONSOLIDATED INCOME STATEMENTfor the six months ended 30 June 2006 Notes Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 30 June 2006 30 June 2005 31 December 2005 $'000 $'000 $'000 Revenue 2 2,584 1,258 3,000Cost of sales (1,639) (734) (2,038)Depletion and depreciation (185) (110) (941) Gross profit 760 414 21 Administrative expenses (net) (2,281) (2,211) (4,895)Depreciation (16) (19) (56) Loss on operations (1,537) (1,816) (4,930) Financing income 3 51 2 123Financing costs 4 (146) (89) (172) Loss before tax (1,632) (1,903) (4,979) Income tax expense - - - Net loss for the period 2 (1,632) (1,903) (4,979) Basic and diluted loss per share (cent) 5 (1.03) (1.90) (3.85) STATEMENT OF RECOGNISED INCOME AND EXPENSEfor the six months ended 30 June 2006 Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 30 June 2006 30 June 2005 31 December 2005 $'000 $'000 $'000Net currency translation gain/(loss) recognised directly in equity 9 7 (18)Net loss for the period (1,632) (1,903) (4,979) Total recognised income and expense for thefinancial period (1,623) (1,896) (4,997) Attributable to equity holders of the Company (1,623) (1,896) (4,997) CONSOLIDATED BALANCE SHEETAt 30 June 2006 Notes Unaudited Unaudited Audited 30 June 2006 30 June 2005 31 December 2005 $'000 $'000 $'000ASSETS Intangible exploration and evaluation 16,254 14,429 15,649assetsProperty, plant and equipment 8,934 8,171 8,368Other investments 418 381 418 Total non current assets 25,606 22,981 24,435 Trade and other receivables 2,163 10,398 1,179Cash and cash equivalents 5,961 554 3,884 Total current assets 8,124 10,952 5,063 Total assets 33,730 33,933 29,498 LIABILITIESCurrent liabilitiesBank overdraft - (434) -Interest-bearing loans and borrowings (48) (28) (42)Trade and other payables (1,795) (3,196) (1,946) Total current liabilities (1,843) (3,658) (1,988) Non-current liabilitiesInterest-bearing loans and borrowings (117) (34) (93)Decommissioning provision (2,333) (2,311) (2,328) Total non-current liabilities (2,450) (2,345) (2,421) Total liabilities (4,293) (6,003) (4,409) NET ASSETS 29,437 27,930 25,089 EQUITYIssued capital 6 11,871 11,003 11,057Share premium 6 44,548 40,088 40,289Share warrant reserve 899 - -Capital conversion reserve fund 234 234 234Foreign currency reserve fund (67) (50) (75)Retained earnings (28,048) (23,345) (26,416) TOTAL EQUITY 29,437 27,930 25,089 CONSOLIDATED STATEMENT OF CASHFLOWSfor the six months ended 30 June 2006 Unaudited Unaudited Audited 6 months ended 30 6 months ended Year ended June 2006 30 June 2005 31 December 2005 $'000 $'000 $'000Operating activitiesLoss for the period (1,632) (1,903) (4,979)Depletion and depreciation 201 129 997Foreign exchange losses 12 18 (9)Financing income (51) (2) (123)Financing costs 146 89 172(Gain)/loss on sale of property, plant and equipment (5) 8 15Equity-settled share-based payment charge 475 7 26Cost of decommissioning (107) - (62)(Increase)/decrease in trade and other receivables (602) 4,772 4,923Increase/(decrease) in trade and other payables 107 (3,208) (3,149)Net cash absorbed by operations (1,456) (90) (2,189)Interest paid (6) (11) (15)Tax paid - - -Net cash outflows from operating activities (1,462) (101) (2,204) Investing activitiesAcquisition of property, plant and equipment (1,108) (282) (1,317)Expenditure on intangible exploration and evaluation assets (737) (209) (1,429)Acquisition of investment assets - - (44)Proceeds from sale of property, plant and equipment 38 18 37Interest received 50 2 90 Net cash outflows from investing activities (1,757) (471) (2,663) Financing activitiesProceeds from the issue of share capital 5,536 - 8,698Payment of transaction costs (270) (39) (751)Loans repaid (22) (36) (82)Loans received 52 - 119 Net cash inflows/(outflows) from financing 5,296 (75) 7,984activities Net increase/(decrease) in cash and cash equivalents 2,077 (647) 3,117Cash and cash equivalents at 1 January 3,884 767 767Cash and cash equivalents at end of the financial 5,961 120 3,884period NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited)for the six months ended 30 June 2006 1. Accounting policies The financial information has been prepared in accordance with the recognitionand measurement principles of all International Financial Reporting Standards(IFRS), including Interpretations issued by the International AccountingStandards Board ("IASB") and its committees and endorsed by the EuropeanCommission. 2. Segmental disclosure Unaudited Unaudited Audited 6 months ended 6 months ended year ended 30 June 30 June 31 December 2006 2005 2005 $'000 $'000 $'000Segmental revenueUS production activities 1,327 769 1,833Oilfield services and supplies 1,257 489 1,167 Total Revenue 2,584 1,258 3,000 Segmental net profit/(loss) for the periodUS production activities 148 (81) (1,454)Exploration activities (251) (408) (564)Oilfield services and supplies 117 (59) (79)Group administrative costs (1,646) (1,355) (2,882) Group net loss for the period (1,632) (1,903) (4,979) Segmental assetsUS producing assets 9,335 8,718 8,652Exploration assets 16,305 14,923 16,082Oilfield services and supplies assets 694 369 299Group assets 7,396 9,923 4,465 Total assets 33,730 33,933 29,498 Segmental liabilitiesUS producing activities (3,065) (3,041) (3,627)Exploration activities (114) (405) (38)Oilfield services and supplies (597) (402) (305)Group activities (517) (2,155) (439) Total liabilities (4,293) (6,003) (4,409) Net assets before borrowings have been adjusted to eliminate the impact ofintercompany financing. NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited)for the six months ended 30 June 2006 3. Financing income Unaudited Unaudited Audited 6 months ended 6 months ended year ended 30 June 2006 30 June 2005 31 December 2005 $'000 $'000 $'000 Deposit interest income 51 2 123 4. Financing costs Unaudited Unaudited Audited 6 months ended 6 months ended year ended 30 June 2006 30 June 2005 31 December 2005 $'000 $'000 $'000 Bank loans and overdraft interest 2 9 11Decommissioning provision interest charge 140 78 157Other finance charges 4 2 4 146 89 172 5. Loss per share Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 30 June 2006 30 June 2005 31 December 2005Numerator for basic and diluted loss pershare:Net loss for the financial period ($'000) (1,632) (1,903) (4,979) Weighted average number of shares:Weighted average number of ordinary shares ('000) 158,600 100,091 129,434 Basic and diluted loss per share (cents) (1.03) (1.90) (3.85) The loss attributable to ordinary shareholders and the weighted average numberof ordinary shares for the purpose of calculating the diluted loss per ordinaryshare are identical to those used for basic loss per Ordinary Share. This isbecause the exercise of share options and warrants would have the effect ofreducing the loss on ordinary shares and they are therefore anti-dilutive. NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited)for the six months ended 30 June 2006 6. Issued share capital and share premium Issued Share capital premium $'000 $'000 At 1 January 2006 11,057 40,289Exercise of options 38 106Issue of shares in part settlement of commercial transaction 35 203Proceeds from placing net of issue costs 741 3,475Equity-settled share-based payment expenses - 475 At 30 June 2006 11,871 44,548 7. Comparative figures Comparative figures have been restated where necessary to reflect the currentperiod's presentation. After publication of the Interim Statement for theperiod ended 30 June 2005, the Group decided to early adopt IFRS 6. In light ofthe content of IFRS 6, the Group also decided to change its accounting policyfor the oil and gas assets from the full cost method to the successful effortsmethod. The comparative figures for the period ended 30 June 2005 havetherefore been adjusted to reflect the change in accounting policy. 8. Statutory Information The interim financial information to 30 June 2006 and 30 June 2005 is unauditedand does not constitute statutory financial information. The financialinformation given for the year to 31 December 2005 does not constitute statutoryaccounts within the meaning of Section 19 of The Companies (Amendment) Act 1986.The statutory accounts for the year to 31 December 2005 have been filed withthe Registrar and the auditors report on these statutory financial statementswas unqualified. The announcement is being sent to shareholders and will bemade available at the Company's registered office at 6 Northbrook Road, Dublin 6and at the Company's UK representative office at 7 Gower Street, London WC1E 9HA This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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