18th Apr 2005 07:01
Europa Oil & Gas (Holdings) PLC18 April 2005 For immediate release EUROPA OIL & GAS (HOLDINGS) PLC ("EUROPA") 2005 INTERIM RESULTS ON TRACK TO MEET PRODUCTION TARGETS 18 APRIL 2005 Europa Oil & Gas (Holdings) plc, the independent oil & gas exploration andproduction group with assets in the UK and continental Europe today announcesits interim results for the six months ended 31 January 2005. Financial Highlights • Turnover of £1.178m (18 months to 31 July 2004 £1.952m) • Operating profit of £0.415m (18 months to 31 July 2004 £0.694m) • Profit after tax of £0.162m (18 months to 31 July 2004 £0.298m) • Net cash of £3.35 million at 31 January 2005 • Net assets of £8.09 million • Earnings per share of 0.33p Operational Highlights • Production from the UK and Ukraine during the period averaged 308 barrels of oil equivalent per day (boepd) • Successful drilling of Bilca-2 in Romania to prove up additional reserves to the west of the Bilca-1 well • Secured approval for two development wells on the West Firsby Field, UK Placing & Admission to AIM • During November 2004 Europa successfully floated on AIM and completed a placing of 20,000,000 shares at 25p each that raised £4.29m after expenses. At the time of the placing, one warrant for every two shares placed was also issued Recent Events & Current Outlook • Drilling of the West Firsby-8 well, UK • Favourably revised terms on a loan from Gemini Oil & Gas to reflect the 100% funding by Europa on the West Firsby 8 well. • Costisa-1 well in Romania spudded in early February 2005 • Fratauti-1 well in Romania spudded in late March 2005 • Geochemical survey on licence PEDL150 near the Whisby field, UK • Development planning for the Bilca and Bilca West gas discoveries underway • Quad 41 preliminary engineering studies in progress • Exercise of 1,065,000 warrants raising an additional £319,500 and increasing the total ordinary shares in issue to 61,065,000 Chairman's Statement The six months to 31 January 2005 have been an eventful and exciting period forthe Company. In November 2004, the Company was admitted to AIM and completed a£5 million fundraising. This provided the Company with the funds to begin torealise the value of its existing projects and secure additional opportunitiesfor future growth. Against this backdrop, the operating environment for Europahas improved with the benefit of continued high commodity prices from its UKonshore oil production, positive political changes in Ukraine and signs of amore market orientated gas-pricing regime in Romania. Romania The Bilca-1 and Bilca-2 gas discoveries in the EIII-1 Brodina concession haveadded 4bcf of net proven reserves and moved to the detailed development-planningphase. The partners have identified a number of similar sized prospects close toBilca. One of these, Fratauti-1, has been drilled and is currently undergoingtesting. Results are expected shortly and, if successful, the well will beincluded in the ongoing Bilca gas project. The development concept for Bilcawill allow for any future discoveries in the area to be tied into the proposedfacilities. The operator, Falcon, has indicated that full project consent willbe sought by late Summer 2005 with first production anticipated in early 2006. Currently, Romanian domestic gas production is sold at a 20% discount to theprevious year's import price resulting in a 2006 price of $4.30 per thousandcubic feet (mcf). There are strong signals that the 20% discount will reducesubstantially with Romanian entry into the European Union in 2007 resulting inan improved gas price. Seismic acquisition is planned to the south of the Bilca/ Fratauti area toevaluate this low risk play further. On the EPI-3 Brates concession, the Costisa-1 well is currently being drilled.This is a deep well with an expected total depth of 4,100 metres and will takesome time to complete. This is an exciting large potential prospect, targetingmultiple reservoirs in the Carpathian sub thrust. Additional seismic acquisition on EIII-3 Cuejdui and EIII-4 Bacau is expected inlate 2005. United Kingdom In the UK North Sea, the Company is moving forward with the 100% operated gascondensate discoveries in blocks 41/24 and 41/25 offshore Scarborough andpresently undertaking engineering studies. The Company is tendering for a vesselto acquire 3D seismic in the second half of 2005 that will be used to identifydevelopment well locations. The Company has also been active on the recently awarded acreage from the 12thonshore licensing round completing the acquisition of a geochemical survey onPEDL 150 over the exploration area adjacent to the Whisby Field. The results ofthis survey are expected shortly and will aid in investigating the extent of theLoxley Edge oil accumulation discovered in the 2003 Whisby 4 well. The Holmwoodprospect, on PEDL 143, also awarded in the 12th round, is ready to drill. TheCompany is currently progressing various planning issues and has identified asuitable drilling location for testing Holmwood. Each of these prospects has thepotential to more than double the existing proven reserve base of the Company. The excellent number 4 well on the Whisby field produced an average net 136barrels of oil per day (bopd) during the six month period. Europa recentlycompleted a sidetrack of the West Firsby 8 well. It is too early to quantify theresults of the new well, but 330ft of net reservoir sands were penetrated and weexpect the new well to contribute to field production from April. Ukraine The pilot production on the Horodok gas field averaged a net 38 boepd during thesix months and the Company is currently awaiting the transition to a fullproduction licence. Further low risk but high reward opportunities are beingpursued to take advantage of our experience and operating capability in theregion. Future prospects The Company is well on the way to its targeted production of 1,000 boepd in 2006and the exploration programme is also moving forward. The Directors feelconfident about the Company's future prospects. Sir Michael Oliver Chairman 18 April 2005 For further information, contact: Europa Oil & Gas (00 33 563 33 18 97) Paul Barrett Citigate Dewe Rogerson (020 7638 9571) Martin Jackson/George Cazenove/Rachel Lankester Westhouse Securities LLP (020 7601 6100) Tim Feather Also see www.europaoil.com CONSOLIDATED PROFIT AND LOSS ACCOUNT For the period ended 31 January 2005 18 6 Months Ended Months Ended 31 31 July January 2004 2005 £ £ Turnover 1,177,682 1,952,051 Cost of sales- Operating costs (249,580) (476,745)- Depletion and amortisation (323,778) (665,722) Gross profit 604,324 809,584 Administrative expenses (189,278) (115,900) Operating profit 415,046 693,684 Interest receivable 120,742 493Interest payable and similar charges (372,375) (375,594) Profit on ordinary activities before taxation 163,413 318,583 Tax on profit on ordinary activities (1,416) (20,539) Retained profit for the financial year 161,997 298,044 Basic Earnings per share 0.33p 0.75p Diluted Earnings per share 0.33p 0.75p CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the period ended 31 January 2005 18 6 Months Ended Months Ended 31 July 31 January 2004 2005 £ £ Profit on ordinary activities after taxation 161,997 298,044 Currency translation difference on foreign currency net investment 8,005 (2,462) Total recognised gains and losses relating to the period 170,002 295,582 CONSOLIDATED BALANCE SHEET as at 31 January 2005 18 6 Months Ended 31 Months Ended 31 July January 2004 2005 £ £ Fixed assetsIntangible assets 3,329,177 2,958,861Tangible assets 2,823,699 3,019,071 6,152,876 5,977,932 Current assetsDebtors 347,475 284,433Cash at bank and in hand 3,347,651 48,789 3,695,126 333,222 Creditors: amounts falling due within one year (287,736) (3,792,621) Net current assets/ (liabilities) 3,407,390 (3,459,399) Total assets less current liabilities 9,560,266 2,518,533 Creditors: amounts falling due after more than one year (1,203,513) (1,191,158) Provision for liabilities and charges (263,286) (300,000) Net assets 8,093,467 1,027,375 Capital and reservesCalled up share capital 600,000 1,000Share premium 4,098,483 669,425Merger Reserve 2,868,032 -Profit and loss account 526,952 356,950 Shareholders' funds 8,093,467 1,027,375 CONSOLIDATED CASH FLOW STATEMENT For the period ended 31 January 2005 18 6 Months Ended Months Ended 31 31 July January 2004 2005 £ £ Net cash inflow from operating activities 249,201 1,005,076 Returns on investments and servicing of finance Interest received & similar income 120,743 493Interest paid & similar charges (372,376) (375,594) Net cash outflow from returns on investments and servicing of (251,633) (375,101)finance Taxation Tax paid (2,023) (29,343) Net cash outflow from taxation (2,023) (29,343) Capital expenditure Purchase of fixed assets (469,926) (3,379,586) Net cash outflow from capital expenditure (469,926) (3,125,576) Net cash outflow before financing (474,381) (2,778,954) Financing Loans (redeemed)/ received (2,820,567) 2,511,478Issue of share capital 6,896,090 - Net cash inflow from financing 4,075,523 2,511,478 Increase/ (decrease) in cash in the year 3,601,142 (267,476) CONSOLIDATED CASH FLOW STATEMENT For the period ended 31 January 2005 Reconciliation of operating profit to net cash outflow from operating activities 18 6 Months Ended Months Ended 31 July 31 January 2004 2005 £ £ Operating profit 415,046 693,684 Depreciation 325,324 665,722 (Increase)/ decrease in debtors (63,045) 93,391 (Decrease) in creditors (391,410) (747,721) Increase/ (decrease) in Provision (36,714) 300,000 Net cash inflow from operating activities 249,201 1,005,076 Reconciliation of net cash flow to movement in net (debt) /funds £ £ Increase/ (decrease) in cash in the period 3,601,142 (267,476) Cash inflow/ (outflow) from Movement in debt 2,645,647 (2,577,362) Change in net funds resulting from cash flows 6,245,511 (2,844,838) Currency translation adjustment 92,805 251,548Net debt at 1 August 2004/ 1 February 2003 (4,237,032) (1,643,742) Net funds/ (debt) at 31 January 2005/ 31 July 2004 2,102,562 (4,237,032) NOTES TO THE ACCOUNTS For the period ended 31 January 2005 1. The results for the period are all derived from continuing operations. 2. The unaudited results have been prepared on the basis of the accounting policies adopted in the annual accounts for the 18 month period ended 31 July 2004. 3. The interim report for the 6 months to 31 January 2005 was approved by the Directors on the 15 April 2005. 4. The calculation of basic earnings per share is based on the weighted average shares in issue throughout the 6 month period. The diluted earnings per share include employee share options. 5. The interim results are unaudited and do not constitute statutory financial statements as defined in section 240 of the Companies Act 1985. 6. At the time of the placing and admission to AIM the shareholders of Europa Oil & Gas Limited exchanged their entire shareholding for 39,999,998 ordinary shares in Europa Oil & Gas (Holdings) plc. Merger accounting has been adopted in respect of this transaction. Accordingly, the interim accounts have been prepared as if Europa Oil & Gas (Holdings) plc had been in existence throughout the period. The comparative figures for the prior 18 month period are based on thoseconsolidated figures published for Europa Oil & Gas Limited. The profit and lossaccount for the current 6 month period reflects the result of Europa Oil & Gas(Holdings) plc from the date of its incorporation on 31 August 2004 and those ofits subsidiaries for the 6 month period to 31 January 2005. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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