Interim Results
Aminex PLC
26 September 2006
AMINEX PLC
("Aminex" or "the Company")
Interim results for the six months ended 30 June 2006
Aminex, the oil and gas company listed on the London and Irish Stock Exchanges,
today announces its preliminary results for the half year ended 30 June 2006.
Highlights
• Loss before tax for period of $1.63 million (2005: loss $1.9 million)
• Placing of new shares amounting to net $5.1 million
• At Nyuni new seismic acquired and large leads and prospects identified.
Now moving towards next drilling phase
• Good progress in Madagascar.
• Egyptian Production Sharing Agreement finalised
• Deep gas well drilled at South Weslaco, Texas and results anticipated in
near future
Brian Hall, Aminex's Chief Executive, commented:
"Next year will see significant levels of activity for the Aminex Group as
drilling operations commence in a number of areas. Aminex has been busy putting
in place the components of an ambitious exploration programme supported by
steady development of producing assets in the USA. We are especially pleased
with the acreage position we have built in East Africa, having established a
number of concessions on attractive terms ahead of a surge in interest in this
region which is becoming a new focus of interest for the oil industry."
26 September 2006
Enquiries:
Aminex PLC +44 (0) 20 7291 3100
Brian Hall - Chief Executive
Simon Butterfield - Finance Director
Pelham Public Relations +44 (0) 20 7743 6679
Archie Berens
OVERVIEW
During the period under review the Aminex Group carried out workover operations
at Shoats Creek, Louisiana, acquired new seismic in Tanzania and Kenya,
reprocessed existing seismic in North Korea, carried out gravity surveys in
Madagascar and, since the period end, has drilled a deep gas well in Texas. In
early June, an institutional share placing successfully raised approximately $5
million to enable seismic and other pre-drilling work to be carried out with a
view to an active drilling programme in 2007, plans for which are on track.
FINANCIAL REVIEW
Turnover at US$2.6 million is 105% ahead of the 2005 comparative period. The
increase is due to both higher gas revenues in the USA and increased levels of
trading from the Group's oilfield services and supplies business. Oil production
was similar for both periods. However, the Group achieved a higher average oil
price for the current period of $59.79 per barrel when compared with the average
oil price achieved for the first six months of 2005 of $46.03 per barrel. Gas
production commenced in late December 2005 from the South Weslaco field and has
continued throughout the period, whereas the Group only benefited from six weeks
of gas production from its Alta Loma field following the re-commissioning of
BP's Texas City refinery.
Gross profit for the period amounted to $0.76 million, an 84% improvement over
the $0.41 million gross profit for the first six months of 2005. After taking
into account administrative expenses of $2.28 million (2005: $2.21 million) and
depreciation and net finance costs of $111,000 (2005: $106,000), the resulting
net loss for the period amounted to $1.63 million, an improvement of $0.27
million over the 2005 loss of $1.9 million.
The increase in fixed assets since 31st December 2005 of $1.17 million relates
to expenditure on exploration activities in East Africa and North Korea as well
as on the Group's producing assets in the USA. Following a share placing which
raised net proceeds of $5.12 million, the cash balance at the end of the
reporting period amounted to $5.96 million (31st December 2005: $3.9 million)
OPERATIONS REVIEW
Tanzania
Aminex's efforts in Tanzania are being directed towards a four well drilling
programme which it aims to conduct during 2007. This will involve two wells on
the Nyuni licence in the Rufiji Delta and two wells on the onshore/offshore
Ruvuma licence which adjoins the border with Mozambique. At Nyuni a number of
large leads and prospects have been either identified or better-defined through
an extensive seismic programme undertaken over the last twelve months. It is
likely that one of the new Nyuni wells will be a close offset to the producing
Songo Songo gas field which has now been successfully delivering gas into a
common user pipeline for two years. The second well will test one of several
potentially large offlying prospects, developed using new seismic and currently
under evaluation. Preliminary negotiations are now ongoing with rig operators
for an appropriate drilling unit. At Ruvuma, where Hardman Resources Ltd. is
earning a 50% interest through paying for an onshore seismic programme, well
locations have yet to be defined. An initial assessment of Ruvuma concludes
that this licence area contains several sizeable oil and gas prospects.
The Nyuni partners are currently Ndovu Resources Ltd. (wholly-owned by Aminex
PLC) 84% and Bounty Oil & Gas NL (6%), with East Africa Exploration Ltd earning
a 10% interest in the licence through financing a final $2 million seismic
programme prior to drilling which is expected to be completed during the fourth
quarter of this year. In 2005 Pan African Tanzania Ltd., ("PAT"), operator of
the Songo Songo gas field and a subsidiary of East Coast Energy Ltd., acquired
seismic over the western part of the licence with a view to earning an option to
participate in a subdivision of the Nyuni licence, subject to the Tanzanian
Government's agreement. Unfortunately it was not ultimately possible to
subdivide the licence as envisaged and additionally the terms for exercising the
option were not completed by PAT. Negotiations are continuing with PAT for its
participation in the greater Nyuni licence with a proportionally reduced
interest in the larger licence area. Aminex's exploration programme is moving
ahead in an expeditious manner and is not dependent on the outcome of
negotiations with PAT.
Madagascar
Aminex and its 50-50 partner Mocoh Resources Ltd., operating through a joint
company known as Amicoh Resources Ltd., have completed a gravity survey over the
10,750 square kilometre onshore Manja concession, Block 3108, and are
reprocessing approximately 2,000 line kilometres of 2D seismic acquired by
previous licensees Chevron and Amoco some years ago. The first year work
programme will be completed on schedule and plans are in hand for new seismic
acquisition in year 2. Meanwhile, a recent onshore licensing round in
Madagascar attracted a high level of interest from a number of international
companies offering high work commitments, including for open acreage directly
adjoining the Amicoh Resources licence. Madagascar has become a focus of
industry interest over the last two years and Aminex is therefore pleased to
have acquired an excellent licence on favourable terms in late 2005.
U.S.A.
Aminex USA, Inc., a wholly-owned subsidiary, has interests in four principal
producing locations, being Alta Loma, Shoats Creek, South Weslaco and Somerset.
Alta Loma produces from a single gas well which has been intermittently
shut-in for some time now as a result of a major fire and explosion some months
ago at BP's Texas City Refinery which was the customer for its production.
However, Texas City is now operational again and Aminex and partners are
considering the construction of a new sales pipeline, to be operational this
year, which would hook up to Texas City and allow greater gas volumes to be
produced than before. Next year a further well is contemplated at Alta Loma,
probably in the first quarter. Aminex and partners have just drilled a third
well at South Weslaco in addition to two gas wells drilled in 2005 which are now
on production. The third well, which aims to test a deeper Lower Frio sand, has
now been drilled and cased and the rig has left the location. Results of this
well will be announced to shareholders once a completion rig has conducted a
production test, expected in the near future. Remedial work and initial
workovers have been carried out at Shoats Creek, Louisiana, and facilities
reconstructed and upgraded. Aminex believes that Shoats Creek has considerable
unrealised potential which will be assessed by a 3D seismic survey to be
conducted in the area by Forest Oil in the next few months at no cost to Aminex.
With the benefit of this survey Aminex will be able to reassess the potential
of Shoats Creek. Somerset stripper production in south Texas benefits from high
prices for heavy crude. A programme of upgrading has been carried out at
Somerset, a number of old wells abandoned and a limited water flood is planned
to increase production.
Kenya
Aminex and partners Upstream Petroleum Services Ltd. and SomKen concluded a
seismic survey and seabed coring exercise over the near shore areas of Kenya
offshore blocks L9 and L10 earlier in the year under the terms of a Technical
Evaluation Agreement. Negotiations are in progress to convert this acreage to
full Production Sharing Agreement ("PSA") status and shareholders will be kept
advised of progress. Woodside Petroleum and partners are thought to be planning
an early well offshore Kenya in deep water which could be very significant for
Kenya's future oil and gas potential.
North Korea
In North Korea (the Democratic Peoples Republic of Korea or "DPRK") progress has
been slower than anticipated, mainly on account of a series of bureaucratic
delays. Aminex's area of concentration is currently the East Sea where a data
gathering exercise is under way. It is likely that a new agreement will be
signed some time during the remainder of this year which will facilitate
accelerated operations and Aminex has been assured that the timetable for the
2005 PSA will be extended to enable commitments to be met in an orderly manner.
Aminex considers the oil and gas potential of the DPRK to be very high, even
though operations require both patience and perseverance. Aminex enjoys
excellent relations with its hosts in the DPRK.
Egypt
On 17th September 2006, as announced to shareholders, a licence for Block 2 in
the onshore West Esh el Mellahah area ("WEEM") was finalised in Cairo with the
Minister of Petroleum at a formal ceremony. This marks the end of lengthy
negotiations and the beginning of a first three year work programme, in which
three wells are planned for 2007. The main prospects in Block 2 are already
covered by 3D seismic data which means that it will be possible to move straight
into the drilling phase. Aminex has an interest of 10% in WEEM and its share of
exploration costs will be carried through to first commercial production by
partners. WEEM is in a proven oil and gas area and close to major existing
production in neighbouring WEEM Block 1. Aminex is reviewing further
exploration opportunities in Egypt.
STRATEGY & PROSPECTS
Aminex has now developed a material portfolio of exploration assets on the East
African margin, in Egypt and on the Korean peninsula, in addition to which it
owns a small but well-run American producing operation. Aminex's strategy is to
move fast to acquire good acreage positions in areas which have not yet fully
attracted the attention of the industry and this strategy has already been
vindicated in Tanzania and Madagascar where interest is growing rapidly in the
areas where Aminex already holds acreage. Most of the work carried out in 2006
has been preparatory to a major drilling campaign which Aminex proposes to
launch in 2007, involving two new wells on each of its Tanzanian licences, three
wells in Egypt and two to three wells in the USA, including a major well at Alta
Loma. Depending on the rate of progress, there is a further possibility of
drilling in both Kenya and Madagascar. This is clearly an ambitious programme
and the precise timing of each well will depend on securing rigs and associated
equipment, the market for which is currently tight. Success in any of these
wells could transform Aminex.
26 September 2006
CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2006
Notes Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 2006 30 June 2005 31 December 2005
$'000 $'000 $'000
Revenue 2 2,584 1,258 3,000
Cost of sales (1,639) (734) (2,038)
Depletion and depreciation (185) (110) (941)
Gross profit 760 414 21
Administrative expenses (net) (2,281) (2,211) (4,895)
Depreciation (16) (19) (56)
Loss on operations (1,537) (1,816) (4,930)
Financing income 3 51 2 123
Financing costs 4 (146) (89) (172)
Loss before tax (1,632) (1,903) (4,979)
Income tax expense - - -
Net loss for the period 2 (1,632) (1,903) (4,979)
Basic and diluted loss per share (cent) 5 (1.03) (1.90) (3.85)
STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the six months ended 30 June 2006
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 2006 30 June 2005 31 December 2005
$'000 $'000 $'000
Net currency translation gain/(loss) recognised
directly in equity 9 7 (18)
Net loss for the period (1,632) (1,903) (4,979)
Total recognised income and expense for the
financial period (1,623) (1,896) (4,997)
Attributable to equity holders of the Company (1,623) (1,896) (4,997)
CONSOLIDATED BALANCE SHEET
At 30 June 2006
Notes Unaudited Unaudited Audited
30 June 2006 30 June 2005 31 December 2005
$'000 $'000 $'000
ASSETS
Intangible exploration and evaluation 16,254 14,429 15,649
assets
Property, plant and equipment 8,934 8,171 8,368
Other investments 418 381 418
Total non current assets 25,606 22,981 24,435
Trade and other receivables 2,163 10,398 1,179
Cash and cash equivalents 5,961 554 3,884
Total current assets 8,124 10,952 5,063
Total assets 33,730 33,933 29,498
LIABILITIES
Current liabilities
Bank overdraft - (434) -
Interest-bearing loans and borrowings (48) (28) (42)
Trade and other payables (1,795) (3,196) (1,946)
Total current liabilities (1,843) (3,658) (1,988)
Non-current liabilities
Interest-bearing loans and borrowings (117) (34) (93)
Decommissioning provision (2,333) (2,311) (2,328)
Total non-current liabilities (2,450) (2,345) (2,421)
Total liabilities (4,293) (6,003) (4,409)
NET ASSETS 29,437 27,930 25,089
EQUITY
Issued capital 6 11,871 11,003 11,057
Share premium 6 44,548 40,088 40,289
Share warrant reserve 899 - -
Capital conversion reserve fund 234 234 234
Foreign currency reserve fund (67) (50) (75)
Retained earnings (28,048) (23,345) (26,416)
TOTAL EQUITY 29,437 27,930 25,089
CONSOLIDATED STATEMENT OF CASHFLOWS
for the six months ended 30 June 2006
Unaudited Unaudited Audited
6 months ended 30 6 months ended Year ended
June 2006 30 June 2005 31 December 2005
$'000 $'000 $'000
Operating activities
Loss for the period (1,632) (1,903) (4,979)
Depletion and depreciation 201 129 997
Foreign exchange losses 12 18 (9)
Financing income (51) (2) (123)
Financing costs 146 89 172
(Gain)/loss on sale of property, plant and equipment (5) 8 15
Equity-settled share-based payment charge 475 7 26
Cost of decommissioning (107) - (62)
(Increase)/decrease in trade and other receivables (602) 4,772 4,923
Increase/(decrease) in trade and other payables 107 (3,208) (3,149)
Net cash absorbed by operations (1,456) (90) (2,189)
Interest paid (6) (11) (15)
Tax paid - - -
Net cash outflows from operating activities (1,462) (101) (2,204)
Investing activities
Acquisition of property, plant and equipment (1,108) (282) (1,317)
Expenditure on intangible exploration
and evaluation assets (737) (209) (1,429)
Acquisition of investment assets - - (44)
Proceeds from sale of property, plant and equipment 38 18 37
Interest received 50 2 90
Net cash outflows from investing activities (1,757) (471) (2,663)
Financing activities
Proceeds from the issue of share capital 5,536 - 8,698
Payment of transaction costs (270) (39) (751)
Loans repaid (22) (36) (82)
Loans received 52 - 119
Net cash inflows/(outflows) from financing 5,296 (75) 7,984
activities
Net increase/(decrease) in cash and cash equivalents 2,077 (647) 3,117
Cash and cash equivalents at 1 January 3,884 767 767
Cash and cash equivalents at end of the financial 5,961 120 3,884
period
NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2006
1. Accounting policies
The financial information has been prepared in accordance with the recognition
and measurement principles of all International Financial Reporting Standards
(IFRS), including Interpretations issued by the International Accounting
Standards Board ("IASB") and its committees and endorsed by the European
Commission.
2. Segmental disclosure
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
30 June 30 June 31 December
2006 2005 2005
$'000 $'000 $'000
Segmental revenue
US production activities 1,327 769 1,833
Oilfield services and supplies 1,257 489 1,167
Total Revenue 2,584 1,258 3,000
Segmental net profit/(loss) for the period
US production activities 148 (81) (1,454)
Exploration activities (251) (408) (564)
Oilfield services and supplies 117 (59) (79)
Group administrative costs (1,646) (1,355) (2,882)
Group net loss for the period (1,632) (1,903) (4,979)
Segmental assets
US producing assets 9,335 8,718 8,652
Exploration assets 16,305 14,923 16,082
Oilfield services and supplies assets 694 369 299
Group assets 7,396 9,923 4,465
Total assets 33,730 33,933 29,498
Segmental liabilities
US producing activities (3,065) (3,041) (3,627)
Exploration activities (114) (405) (38)
Oilfield services and supplies (597) (402) (305)
Group activities (517) (2,155) (439)
Total liabilities (4,293) (6,003) (4,409)
Net assets before borrowings have been adjusted to eliminate the impact of
intercompany financing.
NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2006
3. Financing income
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
30 June 2006 30 June 2005 31 December 2005
$'000 $'000 $'000
Deposit interest income 51 2 123
4. Financing costs
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
30 June 2006 30 June 2005 31 December 2005
$'000 $'000 $'000
Bank loans and overdraft interest 2 9 11
Decommissioning provision interest
charge 140 78 157
Other finance charges 4 2 4
146 89 172
5. Loss per share
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 2006 30 June 2005 31 December 2005
Numerator for basic and diluted loss per
share:
Net loss for the financial period ($'000) (1,632) (1,903) (4,979)
Weighted average number of shares:
Weighted average number of ordinary shares ('000) 158,600 100,091 129,434
Basic and diluted loss per share (cents) (1.03) (1.90) (3.85)
The loss attributable to ordinary shareholders and the weighted average number
of ordinary shares for the purpose of calculating the diluted loss per ordinary
share are identical to those used for basic loss per Ordinary Share. This is
because the exercise of share options and warrants would have the effect of
reducing the loss on ordinary shares and they are therefore anti-dilutive.
NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2006
6. Issued share capital and share premium
Issued Share
capital premium
$'000 $'000
At 1 January 2006 11,057 40,289
Exercise of options 38 106
Issue of shares in part settlement of commercial transaction 35 203
Proceeds from placing net of issue costs 741 3,475
Equity-settled share-based payment expenses - 475
At 30 June 2006 11,871 44,548
7. Comparative figures
Comparative figures have been restated where necessary to reflect the current
period's presentation. After publication of the Interim Statement for the
period ended 30 June 2005, the Group decided to early adopt IFRS 6. In light of
the content of IFRS 6, the Group also decided to change its accounting policy
for the oil and gas assets from the full cost method to the successful efforts
method. The comparative figures for the period ended 30 June 2005 have
therefore been adjusted to reflect the change in accounting policy.
8. Statutory Information
The interim financial information to 30 June 2006 and 30 June 2005 is unaudited
and does not constitute statutory financial information. The financial
information given for the year to 31 December 2005 does not constitute statutory
accounts within the meaning of Section 19 of The Companies (Amendment) Act 1986.
The statutory accounts for the year to 31 December 2005 have been filed with
the Registrar and the auditors report on these statutory financial statements
was unqualified. The announcement is being sent to shareholders and will be
made available at the Company's registered office at 6 Northbrook Road, Dublin 6
and at the Company's UK representative office at 7 Gower Street, London WC1E 9HA
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