Interim Results

Aminex PLC 28 September 2000 INTERIM RESULTS FOR THE SIX MONTHS TO 30th JUNE 2000 AMINEX PLC, the oil and gas company listed on the London and Irish Stock Exchanges, announces its results for the six months to 30th June 2000. HIGHLIGHTS - Net Profit $1.1 million (1999: net loss $980,000) - All Komi oil production sold for export - Record drilling achievements in Russia and the USA - Thirty four wells drilled over a period of one year - New initiatives to develop licences in Komi and Tatarstan - Rapid progress in converting service and supply division to e-commerce CHAIRMAN'S STATEMENT In the last year Aminex has participated in the drilling of thirty-four new wells in Russia and the United States. Twenty-one have been successfully completed for production, five are awaiting completion, three are in progress and five were unsuccessful. In the summer commercial production began from two wells on the Kirtayel Field in the Russian Komi Republic. In the fourth quarter a third well will be put on production and a fourth well will commence drilling. Kirtayel development is financed through loans from the International Finance Corporation, the first such financing arranged by the IFC for an independent oil company in Russia. Aminex has contracted a mobile drilling rig for work on its licences in central Komi where new prospects have been defined. This rig will leave Houston shortly and work for at least two years in Russia. All production from the company's operations in Komi was sold for export in the first half of 2000. The process of converting Amossco, the group's oilfield service and supply arm, into a state of the art e-commerce platform has advanced rapidly since we signed a joint venture agreement with an Internet company in May this year. Surging oil prices have breathed new life into the oil sector and transformed your company's operations. Our decision to acquire US natural gas production in early 1999, when gas prices were near the level of $1 per thousand cubic feet, has paid off as prices have now reached nearly $5 per thousand cubic feet, even before the onset of winter. FINANCIAL RESULTS Group turnover of $10.2 million represents a 61% increase over the first half of last year mainly resulting from higher oil prices. The results of new drilling have had only a limited effect on first half production. In Russia we have achieved an average export price of $23.64 per barrel, an increase of $11.44 per barrel over the comparative period. Cost of sales of $6.4 million was $1.6 million higher than for the first half of 1999, mainly resulting from higher Russian sales and other taxes which vary with the selling price of oil. The improved longer term outlook for oil prices has led us to write back the balance of the asset impairment provision of $580,000 set up in 1998 against the value of the Tunisian assets. Gross profit of $3.2 million compares with a gross profit of $655,000 for the corresponding period, an increase of almost 400%. After taking into account administrative expenses which were 16% higher than 1999, operating profit of $1.9 million compares with an operating loss for the corresponding period of $723,000. The taxation charge of $203,000 was levied against the profits of our Russian operating companies. After taking into account the minority interest, the group net profit for the period amounted to $1.1 million, which compares to a loss of $980,000 for the first half of 1999. Basic earnings per share for the half year was 1.43 cents (1999: loss 1.50 cents). Additions to fixed assets during the period amounted to $4.2 million, the majority of which related to the Kirtayel development in Russia. This was partly financed by drawdowns of $3 million against a $17 million Kirtayel loan facility arranged with International Finance Corporation. OPERATIONS Russia - AmKomi The Kirtayel Field is now on production and selling oil into the Russian pipeline system. Two wells are producing and a third is nearing completion. A continuous drilling programme of twenty new wells is planned. The Aresskoye fields further south in Komi have continued to produce oil for sale and the area has been reassessed, resulting in new leads and drilling prospects which justify further exploration and development work. Primarily for work in this area, Aminex has contracted a Wilson 75 drilling rig which will be in Komi by the end of this year. A modern, western rig of this type will give AmKomi far greater operating flexibility than it currently enjoys. Russia - Tatarstan The Dachnoye Field programme for 2000 is on target. The ten planned wells have been drilled, of which six have been completed for production and the remaining four await completion. A further ten new wells are planned for 2001. Current production is 1,000 barrels per day. The Dachnoye Field has exceeded expectations and reserves are currently being reassessed. USA An active and continuous drilling and workover programme has been in progress during 2000, principally financed through an agreement with McAlester Fuel Company which has earned a revenue interest in many of the US prospects. A deep well to test the Hackberry formation over the Vinton Dome, financed by McAlester, was unsuccessful despite 3D seismic coverage. The hunt for this notoriously elusive but potentially prolific gas formation is being reassessed with a view to a further well. Tunisia Oil production at the El Biban Field has been maintained during the period except for a short break for maintenance at the Zarzis loading terminal. Production of oil is restricted at present by Tunisian government gas flaring limitations, but some progress has been made on plans to handle El Biban gas commercially. Oilfield Services Division In May this year Aminex and an Internet company signed an agreement to form a 50-50 joint venture to develop an oilfield services and supply e-commerce platform. Under this agreement Aminex transferred the business of Amossco (formerly Aminex Oilfield Service and Supply Co. Ltd.) into the new company and the Internet company undertook to provide the technical development of this business as an e-commerce company. Work has progressed rapidly and it is anticipated that an e-commerce trading site will be up and running later this year. OUTLOOK The present high oil prices are a welcome change from the dismal prices which we suffered in 1998 and early 1999. It would be unwise to predict high price levels for the long term because the oil markets are traditionally cyclical. However, we have this year achieved our highest level of activity by far in the company's history with successful drilling results. The new production which will be introduced to our company as a result of this work will provide us with a strong base for future activities. Enquiries : Aminex PLC Brian Hall, Chief Executive 020 7240 1600 Financial Dynamics Greg Quine 020 7269 7206 www.aminex-plc.com AMINEX PLC Unaudited Consolidated Profit and Loss Account Six Months Ended Year Ended 30 June 31 December 1999 2000 1999 US$'000 US$'000 US$'000 Turnover: Group and share of joint 10,186 6,344 15,894 venture Less: share of joint venture turnover (218) 0 0 Group turnover (Note 1) 9,968 6,344 15,894 Cost of sales (6,389) (4,804) (10,046) Write back of impairment of oil and gas 580 - 1,100 assets Amortisation of oil and gas properties (965) (885) (1,912) Gross profit 3,194 655 5,036 Administrative expenses 1,655) (1,418) (3,730) Group operating profit/(loss) 1,539 (763) 1,306 Share of operating profit in - Associate 351 40 - - Joint venture (12) - - Profit/(loss) on ordinary activities before interest 1,878 (723) 1,306 Interest receivable and other income 11 54 151 Interest payable and similar charges - Group (100) (136) (356) - Joint venture - - - - Associate - - - Profit/(loss) on ordinary activities before taxation 1,789 (805) 1,101 Taxation - Group (160) - - - Associate (43) - (25) Profit/(loss) on ordinary activities after taxation 1,586 (805) 1,076 (Profit) attributable to minority interest - equity (491) (175) (711) Retained profit/(loss) for the period 1,095 (980) 365 Basic earnings/(loss) per IR5p Ordinary Share (in cents) (Note 2) 1.43 (1.50) 0.53 Diluted earnings/(loss) per IR5p Ordinary Share (in cents) 1.39 (1.50) 0.53 (Note 2) Rate of dividend (in cents) - - - AMINEX PLC Consolidated Balance Sheet Unaudited Audited 30 June 31 December Note 2000 1999 1999 US$'000 US$'000 US$'000 Fixed Assets Tangible assets 39,898 32,465 36,060 Investments: In joint ventures - Share of gross assets 5 879 - - - Share of gross liabilities 5 (684) - - 195 - Investments in associates 1,956 1,688 1,648 42,049 34,153 37,708 Current assets Stocks 790 708 539 Debtors 5,423 2,623 6,079 Cash at bank and in hand 984 1,390 2,495 7,197 4,721 9,113 Creditors: amounts falling due within one year (6,236) (6,992) (8,504) Net current assets 961 (2,271) 609 Total assets less current liabilities 43,010 31,882 38,317 Creditors: amounts falling due after more than one year (5,360) (365) (2,107) 37,650 31,517 36,210 Capital and reserves Called up share capital 5,648 5,248 5,648 Share premium account 38,809 36,326 38,809 Foreign currency reserve (176) 42 (29) Profit and loss account (11,298) (13,738) (12,393) Shareholders' funds - equity 32,983 27,878 32,035 Minority interest - equity 4,667 3,639 4,175 37,650 31,517 36,210 AMINEX PLC Notes To The Unaudited Accounts Six Months Ended Year Ended 30 June 31 December 2000 1999 1999 US$'000 US$'000 US$'000 1. Turnover: continuing operations Oil and gas production - USA 2,383 1,555 3,657 - Russia 4,098 2,062 5,446 - Tunisia 1,360 533 2,799 7,841 4,150 11,902 Oilfield services 2,345 2,194 3,992 10,186 6,344 15,894 2. Profit per share The calculation of profit per share for the six months ended 30 June 2000 is based on the weighted average number of Ordinary Shares in issue during the period of 76,510,844 (six months ended 30 June 1999: 63,446,624) and on profits on ordinary activities after taxation attributable to the shareholders of Aminex PLC of US$1,095,000 (six months ended 30 June 1999: loss US$980,000). 3. Comparative accounts Comparative accounts have been restated, where necessary, on the same basis as those for the current period. 4. Statutory Information The financial information for the six month periods to 30 June is unaudited and does not constitute statutory accounts within the meaning of Section 19 of the Companies (Amendment) Act 1986. The financial information for year ended 31 December 1999 has been extracted from the audited financial statements which have been filed with the Companies Registration Office. The auditors, KPMG, have reported without qualification on the financial statements for the year ended 31 December 1999. This announcement is being sent to shareholders and will be made available at the Company's registered office at 14 Upper Fitzwilliam Street, Dublin 2 and at the Company's UK representative office at 10 Bedford Street, London WC2E 9HE. 5. Joint Venture On 31 May 2000, the Group entered into an agreement to develop its oilfield services division in a joint venture with an Internet company. The Group has a 50% interest in the joint venture. From 1 June 2000, the oilfield services revenues have been recorded through the joint venture. The operating loss of the oilfield services division to 31 May 2000 amounted to US$133,000 (loss for six months to 30 June 1999: US$370,000). AMINEX PLC Consolidated Cash Flow Statement Six Months Year Ended Ended 30 June 31 December 2000 1999 1999 (Unaudited) (Unaudited) (Audited) US$'000 US$'000 US$'000 Net cash inflow/(outflow) from operating activities 1,716 553 1,040 Returns on investments and servicing of finance Interest received 11 18 20 Rent received - 36 65 Interest paid (364) (136) (242) Net cash outflow from returns on investments and servicing of finance (353) (82) (157) Taxation Overseas tax paid - - - Investing activities Purchase of tangible fixed assets (4,231) (1,278) (5,493) Sale of fixed assets - 14 634 Cash transferred to joint venture (101) - - Cashflow from investing activities before management of liquid resources and finance (2,969) (793) (3,976) Management of liquid resources Cash transferred (to)/ from seven day deposit account - - - Financing activities Issue of ordinary share capital - 1,144 4,132 Issue expenses - (49) (154) New loans drawn down 3,000 - 2,000 Repayment of loan (1,543) (8) (420) Finance leases 295 - - Capital element of finance lease payments (134) (43) (91) Cash inflow from financing activities 1,618 1,044 5,467 Increase/(decrease) in cash (1,351) 251 1,491 Reconciliation of operating profit/(loss) to net cash inflow/(outflow) from operating activities Six Months Year Ended Ended 30 June 31 December 2000 1999 1999 (Unaudited) (Unaudited) (Audited) US$'000 US$'000 US$'000 Operating profit/(loss) 1,539 (763) 1,306 Depreciation charges 1,045 885 2,234 Impairment of oil and gas assets (580) - (1,100) (Increase)/decrease in stocks (251) (86) 38 Decrease/(increase) in operating debtors 615 469 (2,987) Increase/(decrease) in operating creditors (519) (74) 1,452 Foreign exchange movement (147) 122 52 Adjustment for non-cash items 14 - 45 Net cash inflow/(outflow) from operating activities 1,716 553 1,040

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