26th Jun 2007 07:01
Rift Oil PLC26 June 2007 For Immediate Release 26 June 2007 Rift Oil PLC ("Rift" or the "Company") Preliminary Results for the Year ended 31 March 2007 Rift Oil PLC (AIM : RIFT), the oil and gas exploration company with assets inPapua New Guinea, is pleased to announce its preliminary results for the yearended 31 March 2007. Summary of key points: • Memorandum of Understanding signed with Alcan. Objective is to supply 40 BCF per annum of natural gas over 20 years from 2011 • Encouraging results from 54km seismic study designed to define new exploration leads • £1.425m raised through share Placing in February • Appointment of John Bentley as non-Executive Director • RBC Capital Markets appointed as the Company's Broker and Nominated Adviser Chairman, Ian Gowrie-Smith said: "Our central strategy continues to be to commercialise the discovery that wehave already secured on PPL 235 (of which Rift has a 65% interest in), andwhich is located in the forelands of PNG. We are fortunate to have over 3,000square kilometres on this lease and a further 4,000 square kilometres on our 50%held PPL 261 which neighbours PPL 235 on its north side, both these leases arelargely unexplored and are exciting prospects. "More importantly we have signed the non binding Memorandum of Understandingwith Alcan South Pacific. This sets out the activity necessary to furtherinvestigate the supply of 40 BCF of natural gas per annum over the 20 yearscommencing 2011 to the Alcan Gove Refinery in the Northern Territory ofAustralia. We expect this work to be completed in 2008 with the aim of enteringinto a binding agreement to supply natural gas to Alcan Gove Refinery." For further information please contact: Rift Oil PLC 020 73409970David Lees, Finance Director Buchanan Communications 020 7466 5000Tim AndersonIsabel Podda Chairman's Statement In the six months since I last wrote to you much has been achieved. Our central strategy continues to be to commercialise the discovery that we havealready secured on PPL 235 (of which Rift has a 65% interest in), and which islocated in the forelands of PNG. We are fortunate to have over 3,000 squarekilometres on this lease and a further 4,000 square kilometres on our 50% heldPPL 261 which neighbours PPL 235 on its north side, both these leases arelargely unexplored and are in the Board's opinion exciting prospects. In the first part of this year we have received encouraging results from the54km seismic study which has been used to assist in defining the drillinglocation on one of our targets, Puk Puk and gain a deeper understanding of theDouglas structure, both of which are located on PPL 235. More importantly we have signed the non binding Memorandum of Understanding withAlcan South Pacific. This sets out the activity necessary to further investigatethe supply of 40 BCF of natural gas per annum over the 20 years commencing 2011to the Alcan Gove Refinery in the Northern Territory of Australia. We expectthis work to be completed in 2008 with the aim of entering into a bindingagreement to supply natural gas to Alcan Gove Refinery. During February 2007 we placed 47.5m shares to raise £1.425m (before expenses)for interim working capital, and granted 23.75m new warrants, exercisable at 5pper share Rift Oil has a lot of work to do to transform its large acreage in the forelandsof PNG into a producing gas field, and the results to date have reinforced yourBoards view that this is eminently possible. On 14 June 2007 we announced the appointment of RBC Capital Markets as ourBroker and Nominated Advisors. Your Board is confident that their expertise will(a) assist us in our initial goal of securing a long term supply contract to theAlcan Gove Refinery for gas and (b) assist in establishing Rift Oil as aintegrated oil and gas explorer, production and development company. We would also like to thank Mr John Bentley for agreeing to join the Board assenior Non-Executive Director from 14 June 2007. John has significant experiencein the resource sector and we are confident that his contribution will proveinvaluable in maturing this company. My thanks go to the management for their exceptional dedication, in particularthe CEO, Jenni Lean, the PNG staff and to you the shareholders, for making itall possible. Ian Gowrie-Smith Chairman25 June 2007 The financial information presented does not constitute statutory financialstatements for the year ended 31 March 2007 or 2006 as defined in Section 240 ofthe Companies Act 1985. The financial information for the year ended 31 March2007 and the comparative information have been extracted from the auditedfinancial statements for the year ended 31 March 2007, which have not yet beenapproved by shareholders and have not yet been delivered to the Registrar. This preliminary statement was approved by the board of directors on 25 June2007 and has been agreed with the Group's auditors for release. Basis of preparation The financial statements have been prepared in accordance with United Kingdomapplicable accounting standards and under the historical cost convention. Witheffect from 1 April 2006 the group has adopted FRS20, the impact of which is setout in note 13. The accounting policies are consistent with the 'Statement ofRecommended Practice Accounting for Oil and Gas Exploration, Development,Production and Decommissioning Activities' to the extent it is relevant to thegroup. CONSOLIDATED PROFIT & LOSS ACCOUNT For the year ended 31 March 2007 Note 2007 2006 £'000 £'000 Turnover 1 - - Administrative expenses (570) (261) Operating loss (570) (261) Bank interest receivable 51 59 Loss on ordinary activities before taxation 1 (519) (202) Tax on loss on ordinary activities 3 80 (83) Loss on ordinary activities after taxation 12,14 (439) (285) Loss per share 5 (0.125)p (0.095)p All operations are continuing. There were no recognised gains or losses other than the loss for the financialyear. BALANCE SHEETS AT 31 march 2007 For the year ended 31 March 2007 Note Group Group Company Company 2007 2006 2007 2006 £'000 £'000 £'000 £'000Fixed assetsIntangible assets 6 9,564 7,133 - -Tangible assets 7 1,571 1,318 - -Investments 8 - - 4,505 4,505 11,135 8,451 4,505 4,505Current assetsDebtors: due within one year 9 32 4 27 4Debtors: due after one year 9 - - 7,092 4,457Cash at bank and in hand 1,201 852 1,187 852 1,233 856 8,306 5,313Creditors: amounts falling due within one 10 (178) (188) (114) (188)year Net current assets 1,055 668 8,192 5,125 Total assets less current liabilities 12,190 9,119 12,697 9,630 Capital and reservesCalled up share capital 11 4,041 360 4,041 360Shares to be issued 12 - 573 - 573Share premium account 12 8,975 8,582 8,975 8,582Share option valuation reserve 13 9 - 9 -Profit and loss account 12 (835) (396) (328) 115Shareholders' funds 14 12,190 9,119 12,697 9,630 The financial statements were approved by the Board of Directors on 25 June2007. CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 March 2007 Note 2007 2007 2006 2006 £'000 £'000 £'000 £'000 Net cash outflow from operating activities 15 (438) (87) Returns on investments and servicing of financeInterest received 51 59 Taxation - (3) Capital expenditurePurchase of tangible fixed assets (334) -Purchase of intangible fixed assets (2,431) (747) Net cash outflow before financing (3,152) (778) FinancingIssue of ordinary share capital 3,726 -Expenses paid in connection with share issues (225) -Received for shares to be issued - 573Net cash inflow from financing 3,501 573 Increase/(decrease) in cash 16 349 (205) NOTES TO THE PRELIMINARY RESULTS For the year ended 31 March 2007 1 TURNOVER AND LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION There were no sales during the year. An analysis of loss on ordinary activities by geographical market is givenbelow: Operating Operating profit / loss (loss) 2007 2006 £'000 £'000 United Kingdom (524) (186)Rest of the world 5 (16) (519) (202) No segmental analysis of net assets has been provided, as the assets andliabilities attributable to overseas operations are not separately identified. The loss on ordinary activities before taxation is stated after charging: 2007 2006 £'000 £'000 Foreign exchange differences 162 -Depreciation 81 -Auditors' remuneration- audit services - group audit 22 20- non audit services - reporting accountant services - 19- non audit services - taxation services 7 4 In 2007 an amount of £9,000 paid to the auditors in respect of non-auditservices for work as reporting accountants was charged to share premium account. 2 DIRECTORS AND EMPLOYEES Staff costs Staff costs during the year (including Directors' emoluments) for the group andcompany were as follows: 2007 2006 £'000 £'000 Wages and salaries 164 73Social security costs 7 4Pension costs - 5 171 82 The average number of employees of the company during the year was eight (2006:four). The total Directors' emoluments for the year was £137,000 (2006:£73,000). 3 TAX ON LOSS ON ORDINARY ACTIVITIES Tax charge for the period 2007 2006 £'000 £'000 UK corporation tax at 30% - 78(Over)/under provision for tax in prior period (80) 5Current period tax (80) 83 An explanation of the tax position compared to the group reported results is setout below: 2007 2006 £'000 £'000 Loss on ordinary activities before taxation (519) (202) Loss on ordinary activities before taxation multiplied by standard (156) (61)corporation tax rate of 30% Effect of:Expenses not deductible 101 22Overseas tax loses not available to carry forward 55 117Adjustment in respect of prior periods (80) 5Current tax (credit) / charge for the year (80) 83 The Group has an unrecognised deferred tax asset of £228,000 (2006: £42,000) inrespect of losses not recognised. 4 LOSS FOR THE FINANCIAL YEAR The Company has taken advantage of section 230 of the Companies Act 1985 andhas not included its own profit and loss account in these financial statements.The parent company's loss after tax for the year was £444,000 (2006: £104,000). 5 LOSS PER SHARE The calculation for the basic loss per share is based upon the loss attributableto ordinary shareholders divided by the weighted average number of shares inissue during the year. Reconciliation of the loss and the weighted average number of shares used incalculation are set out below:Basic loss per share 2007 2006 Loss on ordinary activities after tax (£000's) (439) (285)Weighted average number of shares (000's) 349,938 299,132Amount of loss per share (0.125)p (0.095)p The options are anti-dilutive so there is no diluted loss per share. 6 INTANGIBLE FIXED ASSETS Oil and gas exploration and appraisal assetsGroup Oil and gas prospecting licence costs £'000Cost and net book amountAt 1 April 2006 7,133Additions 2,431At 31 March 2007 9,564 7 TANGIBLE FIXED ASSETS Group Machinery and Oil drilling Total Equipment rig costs £'000 £'000 £'000CostAt 1 April 2006 - 1,318 1,318Additions 73 261 334At 31 March 2007 73 1,579 1,652 DepreciationAt 1 April 2006 - - -Charge for the year 1 80 81At 31 March 2007 1 80 81 Net book amount at 31 March 2007 72 1,499 1,571 Net book amount at 31 March 2006 - 1,318 1,318 The Company acquired assets to the value of £14,500 from Austral Pacific ontaking over the operatorship of the joint activity agreement. 8 INVESTMENTSCompany Investments in subsidiary undertakings £'000Cost and net book amountAt 1 April 2006 and 31 March 2007 4,505 At 31 March 2007, the subsidiary undertakings were: Subsidiary undertaking Country of incorporation Class of share held Proportion held British Virgin Islands Ordinary 100% Foreland Oil LimitedCoral Sea Drilling (PNG) Ltd British Virgin Islands Ordinary 100%PPL 261 Limited British Virgin Islands Ordinary 100%Coral Sea Drilling Ltd Papua New Guinea Ordinary 100% Foreland Oil Limited is engaged in oil and gas exploration. All other subsidiaries are dormant. 9 DEBTORS Group 2007 2006 £'000 £'000Due within one year:VAT recoverable - 3Other debtors 32 1 32 4 Company 2007 2006 £'000 £'000Due after one year:Amounts owed by group undertakings 7,092 4,457 Due within one year:VAT recoverable - 3Other debtors 27 1 27 4 10 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group 2007 2006 £'000 £'000 Trade creditors 66 7Corporation tax - 80Social security and other taxes 4 3Other creditors 7 -Accruals and deferred income 101 98 178 188 Company 2007 2006 £'000 £'000 Trade creditors 4 7Corporation tax - 80Social security and other taxes 4 3Other creditors 5 -Accruals and deferred income 101 98 114 188 11 SHARE CAPITAL 2007 2006 £'000 £'000Authorised600,000,000 (2006: 100,000,000) ordinary shares of 1p each 6,000 1,000 Allotted, called up and fully paid403,611,999 (2006: 36,040,000) ordinary shares of 1p each 4,036 360Allotted, called up and unpaid500,000 (2006: nil) ordinary shares of 1p each 5 - 4,041 360 On 10 April 2006 the Company increased the nominal capital by £5,000,000 by thecreation of 500,000,000 ordinary shares of 1p each. Unpaid share capital The Group was due £15,000 for shares which were issued in March 2007. Thebalance was received in April 2007. Shares issued in year The Company made allotments (all for cash other than the bonus issue) of368,071,999 of ordinary shares in the year as follows: Date of issue Number of shares Average price Aggregate paid Consideration nominal value £'000 £'000 10 April 2006 24,080,000 5p 1,204 24110 April 2006 (bonus issue) 263,091,999 - - 2,63119 April 2006 22,600,000 5p 1,130 22626 June 2006 10,800,000 5p 540 10823 February 2007 47,500,000 3p 1,425 475 368,071,999 4,299 3,681 Included in the consideration of £4,299,000 was £573,000 received in the yearended 31 March 2006. Warrants As part of the fundraising that took place in February 2007, the Company granted23,750,000 new warrants. The warrants may be exercised at anytime after thefirst anniversary of grant but before the fifth anniversary of grant. Eachwarrant entitles the holder to receive, upon exercise of the warrants, one shareat an exercise price of 5p per share. 12 SHARE PREMIUM ACCOUNT AND RESERVES Group and Group and Group and Group Company company company companyGroup and company Shares to be Share premium Share option Profit and Profit and issued account revaluation loss account loss account £'000 £'000 £'000 £'000 £'000 At 1 April 2006 573 8,582 - (396) 115Received in the year (note 11) (573) 3,249 - - -Expenses in year (225) - - -Share option charge - - 9 - -Bonus issue of shares - (2,631) - - -Retained loss for the year - - (439) (443)At 31 March 2007 - 8,975 9 (835) (328) 13 SHARE BASED PAYMENTS The Group recognised the following charge in the profit and loss accounts inrespect of its share-based payment plans:Group 2007 2006 £'000 £'000 As required by Financial Reporting Standard ("FRS") 20 9 - These are based on the requirements of FRS 20 on share-based payments. Thevolatility measured at the standard deviation of expected share price return isbased on comparator companies and the discount applied is 53% based oncomparator volatility. For this purpose, the weighted average estimated fairvalue for the share option granted was calculated using Black-Scholes optionpricing model in respect of options. The risk free rate has been taken as4.73%. The share price at date of grant of all options was 2.95p and theexercise price was 2.75p. The expected life of the option was 10 years fromdate of grant being the last exercise date. The fair value of the options is1.03p. Option details are set out on page 7. All options were granted on 21March 2005. The Company has a share option scheme for all employees (including directors).Options are exercisable at a price equal to the average market price of theCompany's shares on the date of grant. The vesting period is usually 3 years. If the options remain unexercised after a period of 10 years from the date ofgrant, the options expire. Options are forfeited if the employee leaves thecompany before the options vest. Details of the number of share options and the exercise price (EP) outstandingduring the year are as follows: 2007 2006 EP EP No p No p Outstanding at the beginning of the year 180,000 3p 180,000 3pAdjustment for bonus issue 1,314,000 - - -Outstanding at the end of the year 1,494,000 3p 180,000 3p Exercisable at the year end Nil 3p Nil 3p The share options outstanding at the end of the year have a remainingcontractual life of 8 years (2006: 9 years) and are all exercisable at 3p pershare. 13 SHARE-BASED PAYMENTS (CONTINUED) The fair values were calculated using the Black-Scholes Pricing Model. Theinputs into the model were as follows: Date of issue Number Weighted Weighted Expected Expected Risk Expected Weighted granted average share average volatility life free dividend average fair price exercise rate yield value at price grant date No. P p % Years % % P 21 Mar 2005 1,494,000 2.95 3p 25 5 4.73 Nil 1.08 Expected volatility was determined by calculating the historical volatility ofappropriate comparator company's share prices over the previous 5 years. The Company recognised total expenses of £9,000 (2006: £nil) related toequity-settled share-based payment transactions during the year. 14 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Group 2007 2006 £'000 £'000 Loss for the financial year (439) (285)Issue of shares 3,726 -Share option reserve 9 -Issue costs written off to share premium account (225) -Shares to be issued - 573Net increase in shareholders' funds 3,071 288Shareholders' funds at 1 April 2006 9,119 8,831Shareholders' funds at 31 March 2007 12,190 9,119 15 NET CASH OUTFLOW FROM OPERATING ACTIVITIES 2007 2006 £'000 £'000 Operating loss (570) (261)Depreciation 81 -Increase in share option charge 9 -(Increase)/decrease in debtors (28) 107Increase in creditors 70 67Net cash outflow from operating activities (438) (87) 16 RECONCILIATION NET CASH FLOW TO MOVEMENTS IN NET FUNDS 2007 2006 £'000 £'000 Increase/(decrease) in cash in the year 349 (205)Net funds at 1 April 852 1,057Net funds at 31 March 1,201 852 17 FINANCIAL INSTRUMENTS The Group uses financial instruments comprising only cash balances that arisefrom its operations. The main purpose of these financial instruments is toraise finance for the Group's operations and new acquisitions. Short-term debtors and creditors Short-term debtors and creditors have been excluded from all the followingdisclosures, other than the currency risk disclosure. Currency risk The Group operates within the UK and Papua New Guinea (PNG) and all transactionsare denominated in sterling, PNG kinas and US dollars. As such the Company isexposed to transaction foreign exchange risk. The mix of currencies and termsof trade is such that the directors believe that the company's exposure isminimal and consequently they do not specifically seek to hedge that exposure.At 31 March 2007, the Company had cash balances of £61,000 (2006: £21,000) in USdollars and £14,000 (2006: £125,000) in PNG kinas. Most of the Group's funds arein sterling with only sufficient funds held overseas to meet local costs. Fundsare periodically transferred overseas to meet local costs when required. Fair values The fair values of the Group's instruments are considered equal to the bookvalue. Liquidity risk Liquidity risk is the risk that the group will have insufficient funds to meetits liabilities as they fall due. The directors monitor cash flow on a dailybasis and at monthly board meetings in the context of their expectations for thebusiness to ensure sufficient liquidity is available to meet foreseeable needs. Interest rate risk The directors do not consider that the business is exposed to material interestrate risk. The Group finances its operations through cash reserves. The cashreserves held by the Group during the year have negated the need to use anyinterest bearing short-term borrowings. 18 RELATED PARTY TRANSACTIONS During the year the Group entered into transactions with the followingorganisations, which were related by virtue of common directors and officers: During the year Triple Plate Junction Plc, a company in which directors D J Leesand I Gowrie-Smith were directors and shareholders, charged the Company £44,283(2006: £nil) for Office Management services. The balance was outstanding at theyear end. 19 POST BALANCE SHEET EVENTS On the 14 June 2007 RBC Capital Markets was appointed as the Company's Brokerand Nominated Adviser. Mr John Bentley joined the Board as senior Non-Executive Director from 14 June2007. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Rift Helium