Interim Results

Aminex PLC 27 September 2001 AMINEX PLC INTERIM RESULTS FOR THE SIX MONTHS TO JUNE 2001 AMINEX PLC, the oil and gas and company announces its results for the six months to 30 June 2001. HIGHLIGHTS * Agreement reached to sell Group's interest in AmKomi to Lukoil for $38 million * Tatarstan field production increased to 1,350 barrels per day * High gas prices have increased US revenues * Profit on AmKomi disposal will be reflected in the full year's results CHAIRMAN'S STATEMENT The results for the first half of 2001 have been overshadowed by the disposal of the Group's oil and gas interests in the Komi Republic to Lukoil, as announced to shareholders on 8th August. This will result in a substantial profit to the Group for the full year but has not been recognised in the half year results. The Sale and Purchase Agreement was approved by shareholders on 24 August and should be finalised, after the completion of Russian formalities, in October. The AmKomi disposal will not only yield a material profit but will also free the Group of all bank debt and enable it to diversify its activities into areas which will permit greater operational flexibility and more rapid growth. Much of management's time has been concentrated on Russia in recent years and the disposal will enable it to pursue other opportunities. We are maintaining a presence in Russia through our wholly-owned service company Ami-Tek and through our investment in Ideloil which has been successful in developing the Dachnoye field in Tatarstan. This is a relatively low cost development yielding a satisfactory profit with scope for considerable further development. Operations in the United States are developing satisfactorily. Our gas business, acquired on very favourable terms from Unexco in 1999 at a time of industry recession, has been a major contributor to earnings in the period under review, benefiting from stronger prices. A major gas exploration well is drilling currently on our Alta Loma prospect in Texas. These operations represent a strong foundation for future growth of the business. FINANCIAL RESULTS Turnover of $6.5 million shows a 35% decrease from the first half of 2000 mainly as a result of no longer recognising the turnover of the Group's oilfield service arm, which is now treated as a joint venture. Although three new wells were on production from the Kirtayel Field during the period, but our Russian results were adversely affected by lack of access to the export market. Accordingly, the average oil price achieved from Russian oil sales was $12.33 per barrel whereas oil sales during the comparative period, which were all exported, achieved an average price of $23.64 per barrel. The decline in Russian turnover has been partly offset by higher US gas revenues. Gas prices have averaged $6.41 per mcf during the current period whereas the average price for the comparative period was $2.35 per mcf. Cost of sales for the Group of $4.2 million was $2.2 million lower than 2000 and administrative expenses of $862,000 have declined by 11%. Total operating profit of $451,000 compares with $1.88 million for the first six months of 2000. The taxation charge of $144,000 relates to our Russian operations (including our associate company) and compares with $203,000 for 2000. After taking into account the profit attributable to the minority interest of $184,000 (2000: $491,000), the resulting Group net profit amounted to $377,000 which compares with a net profit of $1,095,000 for the first six months of 2000. Basic earnings per share for the half year was 0.49 cents (2000: 1.43 cents). Additions to fixed assets during the period amounted to $2.35 million and mainly related to the Kirtayel Field development. This expenditure was partially funded by drawdowns on our credit facility with the International Finance Corporation and the balance by working capital. OPERATIONS Russia - AmKomi The second new well at the Kirtayel field was completed, tested at over 2,000 barrels of oil per day and put on production with the two existing producers. Development activities continued at the Aresskoye fields further south with workovers, recompletions and the reactivation of old exploration wells. Oil production was increased to approximately 2,850 barrels per day by the end of the reporting period. Russia - Tatarstan The 2001 development programme for the Dachnoye field was completed earlier than expected with the drilling of ten new wells and the reactivation of a further four wells. Additional drilling and well completions have continued and oil production has increased to approximately 1,350 barrels per day. USA After the success of the 2000 programme, the drilling rig was released from the Vinton oilfield to enable a period of geological review. In July, the rig was moved back to drill the first of four identified locations. Recompletions and workovers continued at all producing fields and preparations were completed to drill an exploration well in the Alta Loma field, Texas. This well has just drilled to a planned total depth of 15,300 feet. After greater than expected production, the Spartan gas field commenced a rapid decline and our interest has since been sold. Average production to Aminex's working interests during the reporting period was 500 barrels oil per day and 2.5 million cubic feet gas per day. LITIGATION Aminex has been informed that an accident occurred on a drilling rig in the USA on May 17, 2001 when the drilling rig derrick structure collapsed. Two individuals suffered fatal injuries and four others were hospitalised. It is not known at this stage why or how the accident occurred. Prior to the accident, Aminex's US subsidiary had acted as agent in the sale of the rig to a third party. A claim has been brought against a number of parties, including Aminex's US subsidiary. Whilst there can be no certainty regarding the outcome of this matter, the Directors believe, on the information currently available, that there is no basis for any claims against the Aminex Group. OUTLOOK The first half has benefited from high oil prices, except in the case of Komi production. It has also benefited from high gas prices in the United States. The latter may well persist in view of the supply/demand situation in the domestic gas market. However the outlook for oil prices is much more difficult to call in view of the current politico-economic situation. OPEC appears willing to regulate the supply of oil in such a way as to minimise the destabilisation of vulnerable economies, but this will not be easy to achieve. There is always a danger that political considerations will outweigh purely economic considerations affecting the security of supply and pricing of crude oil. Our current operations are profitable and expanding. They have, by and large, good cost structures and should be able to withstand a degree of market turbulence. However the emphasis for Aminex will be on the pursuit of opportunities that will both complement existing operations and open up new areas suited to our strategies. Opportunities abound but need careful evaluation. We have an effective organisation with a strong professional background and proven deal-making ability. We also have liquidity. This gives grounds for optimism at a difficult time. Peter Elwes Chairman 27 September 2001 Enquiries Aminex PLC Tel: 020 7240 1600 Brian Hall, Chief Executive College Hill Tel: 020 7457 2020 James Henderson AMINEX PLC Unaudited Consolidated Profit and Loss Account Six Months Ended Year Ended 30 June 31 December 2001 2000 2000 (Unaudited) (Unaudited) (Audited) Notes US$'000 US$'000 US$'000 Turnover: Group and 8,176 10,186 19,968 share of joint venture Less: share of joint (1,639) (218) (968) venture turnover Group turnover 1 6,537 9,968 19,000 Cost of sales (4,232) (6,389) (12,117) Write back of - 580 580 impairment of oil and gas assets Amortisation of oil (862) (965) (1,768) and gas properties Gross profit 1,443 3,194 5,695 Administrative (1,440) (1,655) (3,034) expenses Group operating 3 1,539 2,661 profit Share of operating 522 351 1,161 profit in - Associate - Joint venture (74) (12) (145) Total operating 451 1,878 3,677 profit Goodwill written off - - (382) on part disposal of subsidiary undertaking Profit on ordinary 451 1,878 3,295 activities before interest Interest receivable 321 11 308 and other income Interest payable and (63) (100) (187) similar charges -Group - Joint venture (2) - (108) - Associate (2) - (2) Profit on ordinary 705 1,789 3,306 activities before taxation Taxation - Group (46) (160) (390) - Associate (98) (43) (129) Profit on ordinary 561 1,586 2,787 activities after taxation (Profit) (184) (491) (960) attributable to minority interest - equity Retained profit for 377 1,095 1,827 the period Basic earnings per 3 0.49 1.43 2.39 IR5p Ordinary Share (in cents) Diluted earnings per 3 0.49 1.39 2.33 IR5p Ordinary Share (in cents) Rate of dividend (in - - - cents) Details of the proposed disposal of Aminex Production Company Limited and its 55% interest in OOO AmKomi are set out in Note 2. In accordance with Financial Reporting Standard 2, the results of the assets subject to disposal are included in the Group's financial statements until the date of completion at which time the various outstanding conditions will have been met. AMINEX PLC Consolidated Balance Sheet 30 June 31 December 2001 2000 2000 (Unaudited) (Audited) Notes US$'000 US$'000 US$'000 Fixed Assets Tangible assets 39,330 39,898 37,747 Investments: In joint ventures - share of 827 879 923 gross assets - share of gross liabilities (678) (684) (545) 149 195 378 Investments in associate 3,090 1,956 2,572 42,569 42,049 40,697 Current assets Investments - - 750 Stocks 1,859 790 1,083 Debtors 4,594 5,423 4,913 Cash at bank and in hand 3,107 984 4,485 9,560 7,197 11,231 Creditors: amounts falling (4,933) (6,236) (5,774) due within one year Net current assets 4,627 961 5,457 Total assets less current 47,196 43,010 46,154 liabilities Creditors: amounts falling due after more than one year (7,247) (5,360) (6,792) 39,949 37,650 39,362 Capital and reserves Called up share capital 5,648 5,648 5,648 Share premium account 38,809 38,809 38,809 Foreign currency reserve (21) (176) (46) Profit and loss account (9,807) (11,298) (10,184) Shareholders' funds - equity 34,629 32,983 34,227 Minority interest - equity 5,320 4,667 5,135 39,949 37,650 39,362 AMINEX PLC Consolidated Cash Flow Statement Six Months Ended Year Ended 30 June 31 December 2001 2000 2000 (Unaudited) (Unaudited) (Audited) Note US$'000 US$'000 US$'000 Net cash inflow from 139 1,716 3,939 operating activities Returns on investments and servicing of finance Interest received 88 11 59 Interest paid (460) (364) (301) Net cash outflow from returns on investments and servicing of finance (372) (353) (242) Taxation Overseas tax paid (118) - (25) Investing activities Purchase of tangible (2,353) (4,231) (8,763) fixed assets Sale of fixed assets 287 - 200 Cash transferred to - (101) - joint venture Acquisitions and disposals Disposal of subsidiary - - 5,534 undertaking Cash transferred on - - (9) disposal of subsidiary undertaking Loans repaid 133 - (525) by/(advanced) to joint venture Disposal/(purchase) of 750 - (750) investments Cashflow from investing activities before management of liquid (1,534) (2,969) (641) resources and finance Financing activities New loans drawn down 500 3,000 5,000 Repayment of loan (286) (1,543) (2,257) Finance leases - 295 - Capital element of (58) (134) (8) finance lease payments Cash inflow from 156 1,618 2,735 financing activities (Decrease)/increase in (1,378) (1,351) 2,094 cash Reconciliation of operating profit to net cash inflow from operating activities Six Months Ended Year Ended 30 June 31 December 2001 2000 2000 (Unaudited) (Unaudited) (Audited) Note US$'000 US$'000 US$'000 Operating profit 3 1,539 2,661 Depreciation charges 984 1,045 2,013 Impairment of oil and - (580) (580) gas assets Increase in stocks (776) (251) (544) Decrease in operating 319 615 847 debtors Decrease in operating (435) (519) (453) creditors Foreign exchange 44 (147) (5) movement Adjustment for - 14 - non-cash items Net cash inflow from 139 1,716 3,939 operating activities AMINEX PLC Notes To The Unaudited Accounts Six Months Ended Year Ended 30 June 31 December 2001 2000 2000 (Unaudited) (Unaudited) (Audited) US$'000 US$'000 US$'000 1. Turnover - continuing operations Oil and gas production - USA 3,184 2,383 6,331 - Russia 3,353 4,098 9,242 6,537 6,481 15,573 - discontinued operations - 3,487 3,427 6,537 9,968 19,000 2. Proposed disposal of subsidiary undertaking On 7 August 2001, Aminex PLC entered into a conditional Sale and Purchase Agreement with Acont Enterprises Limited ('AEL'), a wholly-owned subsidiary of OAO Lukoil whereby Aminex agreed to sell and AEL agreed to purchase Aminex Production Company Limited ('APCOL') for a purchase price of US$38.5 million. APCOL's principal asset is a 55% interest in OOO AmKomi, a Russian limited liability company which operates oil producing properties in the Komi Republic. Full details of the transaction were sent to shareholders in a circular dated 8 August 2001. In accordance with Financial Reporting Standard 2, the results of the assets subject to disposal are included in the Group's financial statements until the date of completion at which time the various outstanding conditions will have been met. Included in the Consolidated Profit and Loss Account are the following results relating to APCOL and its 55% interest in OOO AmKomi: Six Months Ended Year Ended 30 June 31 December 2001 2000 2000 (Unaudited) (Unaudited) (Audited) Notes US$'000 US$'000 US$'000 Turnover 1 3,353 4,098 9,242 Cost of sales (2,638) (2,919) (7,016) Amortisation of oil (515) (252) (711) and gas properties Gross profit 200 927 1,515 Administrative (508) (339) (733) expenses (308) 588 782 Interest receivable 141 4 220 and other income Interest payable and - - (1) similar charges Profit on ordinary (167) 592 1,001 activities before taxation Taxation (46) (160) (390) Profit on ordinary (213) 432 611 activities after taxation (Profit) (184) (491) (960) attributable to minority interest - equity Retained loss for (397) (59) (349) the period 3. Profit per share The calculation of profit per share for the six months ended 30 June 2001 is based on the weighted average number of Ordinary Shares in issue during the period of 76,510,844 (six months ended 30 June 2000: 76,510,844) and on profits on ordinary activities after taxation attributable to the shareholders of Aminex PLC of US$377,000 (six months ended 30 June 2000: profit US$1,095,000). 4. Comparative accounts Comparative accounts have been restated, where necessary, on the same basis as those for the current period. 5. 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 2000 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 2000. 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.

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