17th May 2006 10:54
Forum Energy Plc17 May 2006 17 May 2006 Forum Energy plc ('Forum' or 'the Company') Unaudited preliminary results for the period to 31 December 2005 Forum, the Philippines focused oil, gas and coal E&P Company quoted on AIM,today announces its preliminary results for the period ended 31 December 2005. Highlights of the period include: • Incorporation of Forum and admission to AIM on 2 August 2005; • Raising a total of £14.4 million (pre-expenses) through a pre-IPOplacing and subsequent IPO placing on Admission to AIM; • Completion of a 2D seismic survey in Tanon Straits, SC40, and a 3Dseismic survey over the Sampaguita Gas Field, GSEC101; • Libertad Gas Field declared commercial in November 2005; • Completion of the acquisition of Basic Petroleum and Minerals Inc inApril 2006; • Substantial progress made towards first coal revenues from the CentralCebu contract area in the second half of 2006; and • New executive management team in place Commenting, Alan Henderson, Executive Chairman, said: "I am pleased to report that the Company has made significant progress towardsits goal of becoming a successful oil, gas and coal producer with a strategicfocus on the resource-rich Philippines. We are continuing to use the funds raised in 2005 to carry out our extensivework programmes and to evaluate and pursue additional acquisition opportunities. Forum is the only AIM-quoted exploration and production company that is focusedexclusively on the Philippines, and we are encouraged by the potential forprofitable growth that the country offers. Over the course of the year, wecompleted key offshore seismic surveys and won approval for our first commercialdevelopment at the Libertad gas field. Work is also progressing satisfactorilyon our coal operating contracts on the island of Cebu. Most exciting of all, wehave now completed the acquisition of the Philippine oil and gas assets of BasicConsolidated Inc, providing Forum with immediate production and significantupside potential in both production and reserves. I would also like to welcome Russell Harvey and Cameron Pearce to the Company asCEO and Finance Director respectively. Russell and Cameron bring a wealth ofexperience in the industry and AIM-quoted companies and we look forward to theircontributions as we seek to bring our revenue generating opportunities tofruition." For further information contact: Alan Henderson, Forum Energy Plc: +44 (0) 19 3244 5344 Adam Westcott, Noble & Company Limited: +44 (0) 20 7763 2200 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 I am pleased to present your company's inaugural Annual Report since ForumEnergy plc was incorporated in April 2005, and to report that the Company hasmade significant progress towards its goal of becoming a successful oil, gas andcoal producer with a strategic focus on the resource-rich Philippines. In May 2005, we successfully raised £3.4 million gross in a pre-IPO placement at100p per share, followed by an IPO placement of £11.0 million gross at 112p pershare and admission to AIM in August. Our working capital position as of 31December 2005 was US$14.0 million (approx. £7.4 million per exchange rate as at15 May 2006) and we are continuing to use the funds raised in 2005 to carry outour extensive work programmes and to evaluate and pursue additional acquisitionopportunities. Forum is the only AIM-quoted exploration and production company that is focusedexclusively on the Philippines, and we are encouraged by the potential forprofitable growth that the country offers. Over the course of the year, wecompleted key offshore seismic surveys and won approval for our first commercialdevelopment at the Libertad gas field. Work is also progressing satisfactorilyon our coal operating contracts on the island of Cebu. Most exciting of all, wehave now completed the acquisition of the Philippine oil and gas assets of BasicConsolidated Inc, providing Forum with immediate production and significantupside potential in both production and reserves. Economic and Political Outlook for the Philippines We believe the investment climate in the Philippines is stable and generallyvery favourable. Last year, the economy grew at 5.1 per cent. and is expectedto grow even faster in 2006 at 5.8 per cent. Factors that could help stimulate higher growth in gross domestic product (GDP)include the strong upward trend in foreign direct investments (FDIs) andportfolio equity investments. In 2005 FDIs reached one per cent. of GDP,compared with 0.1 per cent. the previous year. Total investments last year were19 per cent. of GDP, compared with 17.4 per cent. in 2004. The mining industry is expected to be a key growth area this year and next,along with the business process outsourcing sector. Exports continue to becompetitive, and grew 15.7 per cent. year-on-year in December 2005. The Philippine government has also announced a programme of improvements to thecountry's infrastructure which, when implemented, can be expected to lead to afurther boost in inward investment. This positive outlook leaves Forum strongly positioned to progress its excitinggrowth strategy. Board Developments Having taken the Company to its successful listing and positioned it for thefuture, David Robinson decided to resign as Chief Executive, effective 15 May2006, to pursue business interests in his native Canada. We greatly appreciateall his efforts during the vital formative stages of the Company. We are delighted to welcome Russell Harvey as our new Chief Executive. Russellhas over 30 years' experience in the upstream business and has been instrumentalin the building of several companies. We are extremely confident that Forum willcontinue to grow in size and value under his leadership. David Thompson, who played a valuable role in the formation and flotation ofForum Energy plc, resigned from his position as Chief Financial Officer inFebruary 2006 to concentrate on his interests in Bermuda. He continues to assistthe Company. Our new Chief Financial Officer, Cameron Pearce, joined us in the same month.Cameron has extensive industry experience, having previously worked for threeother AIM-quoted companies, as well as in banking, and we are delighted to havehim as a member of the Forum team. Outlook for 2006 Forum Energy has established a solid foundation on which to build a profitableand growing company focused on exploring and developing the exciting potentialof the Philippines' energy resources. In the next year and beyond, we look forward to creating significant andsustainable value for our shareholders from our already strong portfolio of gas,oil and coal assets, and from additional strategic acquisitions. During 2006, we will achieve our first revenues - first through oil productionresulting from the Basic acquisition, followed by coal production beginning inthe second half of the year. We also look forward to reporting on other developments in the coming monthsincluding: the expansion of our interests in the NW Palawan area; theacceleration of coal development in Central and Southern Cebu; interpretation ofthe 3D seismic survey over the Sampaguita Gas Field and of the 2D surveycovering the Tanon Straits prospects off Cebu; the results of the workover andtesting of the F2X well on the Maya discovery; and on additional growthopportunities that Forum will continue to identify, evaluate and pursue. Finally, I should like to thank my fellow directors for their energetic supportin the creation of our young company. We are indebted to all our staff in the UKand the Philippines for their commitment and enthusiasm in meeting our initialobjectives, and I congratulate them for establishing a solid and tremendouslypromising foundation for our company. Forum Energy's first year has been a productive one. The outlook is undoubtedlyexciting. We look forward to your continued support, and to keeping you informedof our progress. Forum Energy Plc Unaudited consolidated statement of loss for the period from 1st April 2005 to31st December 2005 US$'000 Administrative expenses (1,315) _______ Loss from Operations (1,315) _______ Financial Income 260Financial Costs (14) _______ Loss on ordinary activities before taxation (1,069) Taxation - _______ Loss on ordinary activities after taxation (1,069) _______ Attributable to: Equitable Holders of the Parent (867)Minority Interest (202) _______ Loss for the Period after taxation and deficit carried forward (1,069) _______ Equitable Holders of the Parent: Accumulated Deficit brought forward - _______ Accumulated Deficit carried forward (867) _______ Loss per Ordinary Share (US$)Basic (0.044)Fully diluted (0.042) _______ All amounts relate to continuing activities. Forum Energy Plc Unaudited consolidated balance sheet at 31st December 2005 US$'000 US$'000 Non-Current Assets Intangible assets 39,220 Tangible assets 355 _______ Total Non Current Assets 39,575 Current Assets Inventory 105 Trade and Other Receivables 836 Short-Term Notes Receivable 720 Other Financial Assets 215 Cash and Cash Equivalents 12,635 _______ Total Current Assets 14,511 _______ Total Assets 54,086 Liabilities:Current LiabilitiesTrade payables 420Other payables 40 _______ Total Current Liabilities 460 Non-Current Liabilities Other payables 1,238 Total Liabilities (1,698) _______ Total Net Assets 52,388 _______ Capital and reserves attributable to equityholders of the company Called up share capital 4,932 Share premium account 46,714 Other Reserves 51 Foreign exchange reserve (499) Retained losses (867) _______ 50,331 Minority Interest 2,057 _______ Total Equity 52,388 _______ Forum Energy Plc Unaudited cash flow statement for the period from 1st April 2005 to 31stDecember 2005 US$'000 US$'000 Operating activitiesNet loss from ordinary activities (1,069) Adjustments for: Depreciation 215 Share Options Expense 51 Realised Foreign Exchange Losses 28 Interest expense 14 Interest income (260) Minority Interest (202) (154) _______Operating loss before changes in working capital and provisions (1,223) Increase in trade and other receivables (1,997)Increase in inventories (105)Increase in trade and other payables 1,698 (404) _______ Cash outflows from operating activities (1,627) _______ Investing Activities Interest income 260Purchase of tangible fixed assets (382)Sale of tangible fixed assets 69Acquisition of Intangible assets (8,720) _______ Cash flows from Investing activities (8,773) _______Financing ActivitiesInterest expense (14)Issue of ordinary share capital (net of issue costs) 22,823 _______ Cash flows from financing activities 22,809 _______ Increase in cash 12,409 Cash and cash equivalents at beginning of the period - Unrealised foreign exchange movements 226 _______ Cash and cash equivalents at end of the period 12,635 _______ Forum Energy Plc Notes forming part of the unaudited financial statements for the period from 1stApril 2005 to 31st December 2005 1 Accounting policies Basis of preparation These financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRS and IFRIC interpretations) issued by theInternational Accounting Standards Board (IASB) and with those parts of theCompanies Act 1985 applicable to companies preparing their accounts under IFRS.This is the first time the company has prepared its financial statements inaccordance with IFRS and is based on the financial information for the periodfrom 1st April 2005 (the Company's date of incorporation) to 31st December 2005.The financial statements have been prepared using the US Dollar as this is thefunctional currency of the group. 2 Loss per share Earnings per ordinary share have been calculated using the weighted averagenumber of shares in issue during the relevant financial periods. The weightedaverage number of equity shares in issue for the period is 19,890,483 and on afully diluted basis is 20,694,925. This fully diluted basis includes the effectof exercising the 1,423,207 and 24,793 stock options issued on 1st August 2005and 15th August 2005 respectively. Losses for the group attributable to the equity holders of the parentfor the period are US$876,261. Since the period end the Company has agreed to issue 1,333,759ordinary shares of 10p in respect of partial consideration on the acquisition ofBasic Consolidated, Inc. (see note 23). In addition the Company agreed to issue300,000 options to Cameron Pearce, the CFO on 1st March 2006 and cancelled360,000 options. 3 Reconciliation of movements in shareholders' funds Period from 1st April 2005 to 31st December 2005 US$'000 Group Loss for the period attributable to the equity holders of the parent (867) Increase in reserve for issue of stock options 51 Unrealised foreign exchange differences (499) Issue of shares 51,646 ________ As at 31st December 2005 50,331 ________ Minority interest US$'000 Minority share of net assets arising on acquisition of assets (note 20) 2,258 Minority share of net loss for the period (202) _____ As at 31st December 2005 2,056 _____ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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