Interim Results

Independent Resources PLC 15 June 2006 Independent Resources plc INTERIM RESULTS FOR THE PERIOD ENDED 31 MARCH 2006 Independent Resources plc ('Independent Resources' or the 'Group'), the international gas storage and development company with extensive operations in Italy and Tunisia, today announces its interim results for the period from incorporation on 16 June 2005 to 31 March 2006. The Group is reporting its interim results under International Financial Reporting Standards (IFRS). FINANCIAL AND OPERATIONAL HIGHLIGHTS • £5.06 million (pre-expenses) raised on admission to AIM in December 2005 • Significant progress made on gas storage and exploration projects • Permitting authorities' preliminary feedback on the Rivara gas storage project EIA now integrated, formal submission imminent • Approaches from several potential Rivara partners • Re-entry of Sidi Toui-3 appraisal well on schedule for third quarter • First well on Fiume Bruna CBM permit to be drilled in third quarter CHAIRMAN'S STATEMENT This is our first reporting period since Independent Resources was incorporated in June 2005 and includes our successful admission to AIM in December. During this time, the Board believes that the Group has made encouraging progress in evaluating and developing its promising portfolio of gas storage and upstream oil and gas assets. We have been prudent with our expenditures, and have set and achieved specific milestones for all our activities. We maintain ample liquidity with over £5 million in cash and equivalents. This is being applied to accomplish the work programmes we described to the investment community in our prospectus. Independent Resources provided an operational update to the investment community at the end of March this year, and it is fair to say that our activities in relation to Rivara, Fiume Bruna and Ksar Hadada have continued to gather momentum since then. Rivara UGS The Rivara underground gas storage ('UGS') project in northern Italy has the potential to become a major, high-performance storage facility located close to Italy's physical gas balancing point and alongside the gas 'motorway' that transports Europe's long-term gas supplies from North Africa. Last winter, Italy experienced its first full-blown gas supply crisis which was due primarily to the shortage of storage and deliverability capacity. The Board is confident that the development of Rivara will prove to be extremely profitable, not only in mitigating these physical constraints but also in providing a long-term strategic platform for national, and eventually intercontinental, gas pricing arbitrage. As evidence of its potential, Rivara has recently been the subject of a specific partnership and farm-in proposal from one of Europe's leading gas utilities, as well as several other unsolicited expressions of interest, the details of which are subject to confidentiality obligations. We will be carefully evaluating all such approaches to determine whether it is in our shareholders' best interests to pursue them further, at this early stage in the development of what, we believe, will be a unique and valuable resource. In parallel, Independent Resources' gas storage subsidiary, IGM, has recently executed a Memorandum of Understanding ('MoU') with Bologna-based Hera SpA (www.gruppohera.it/english), the principal multi-utility within the Emilia Romagna region. As geographic neighbours with overlapping business objectives and a common regulatory regime, both parties recognise that there are potential benefits to be gained through co-operation. While no binding obligations are entailed in the MoU, it is hoped that this arrangement will generate mutually-advantageous business opportunities for both companies. The Board also believes that this regional co-operation will enhance the planning process for Rivara. The Environmental Impact Assessment ('EIA'), on which the final planning consent is granted, is about to be formally submitted, and we are already incorporating detailed improvements based on constructive feedback from national, regional and local administrations. As previously highlighted, the Italian government and regulatory authorities are encouraging Independent Resources to advance its plans for Rivara as quickly as possible in view of the country's increasingly severe gas supply constraints. Ksar Hadada, Tunisia Plans to re-enter the Sidi Toui-3 well remain on target for Q3 this year. Preparations for this are progressing on all fronts, with an emphasis on securing long lead-time items such as tubulars. The existing well-head and well-site have been inspected and negotiations to secure a drilling rig are underway, along with limited reprocessing and interpretation of the seismic and well data. The Ksar Hadada permit, operated by a subsidiary of Petroceltic International plc, covers more than 7,000 sq km in southeast Tunisia, and contains a number of other promising leads besides Sidi Toui. Independent Resources holds a 40% interest in the permit. Fiume Bruna CBM project Bids have been received for drilling the first well on our 100%-held Fiume Bruna coal bed methane ('CBM') permit, and these are now being assessed prior to selecting a drilling contractor. The bids received are consistent with our revised budgets, and the current expected capital outlay required to bring Fiume Bruna into production, which is significantly lower than envisaged at the time of our admission to AIM, has led the Board to revise upwards its conservative valuations of the project. The initial well will be classified as a stratigraphic well and is expected to spud in the third quarter of this year. Drilling results, which will include flow rates, produced water composition and an accurate indication of the methane content per tonne of coal, should be available soon thereafter. This drilling information will be invaluable in planning the next phase of appraisal for the development, which is likely to be acquisition and processing of additional seismic data. This will be the first-ever CBM well in Italy. Arrangements for determining the gas content and composition have been put in place at an on-site facility and in the laboratories of INGV (Italy's National Institute of Geophysics and Vulcanology), under the guidance of CBM specialists, Questa Engineering Corporation, of Colorado. The Group intends to submit a formal environmental impact screening submission relating to the Fiume Bruna project within the next few weeks. However, neither submission nor approval is required for drilling this initial well or acquiring additional seismic data. The Board is greatly encouraged by the results of our activities to date, and I look forward to keeping you informed of our continuing progress in the future. Grayson Nash Executive Chairman Independent Resources plc For further information contact: Independent Resources plc Grayson Nash, Executive Chairman 00 39 02 3655 960 Steve Staley, Managing Director 01332 865 253 07771 838 753 First City Financial Public Relations Ian Foster 07739 185050 Deloitte Corporate Finance Jonathan Hinton 020 7936 3000 David Smith 020 7936 3000 CONSOLIDATED INCOME STATEMENT Period ended 31 March 2006 31-Mar 2006 £ Continuing operations Revenue - Cost of sales - ________ Gross profit - Distribution costs - Administrative expenses (345,180) ________ (345,180) Other operating income - ________ Operating loss (345,180) Exceptional items - ________ (345,180) Net financial income 85,304 ________ Loss on ordinary activities before taxation (259,876) Tax - ________ Loss for the period attributable to equity holders of the parent (259,876) ======= Basic earnings per share (2)p Diluted earnings per share (2)p CONSOLIDATED BALANCE SHEET Period ended 31 March 2006 31-Mar 2006 £ Non-current assets Goodwill 519,756 Other intangible assets 486,131 Property, plant and equipment 64,647 ________ 1,070,534 Current assets Trade and other receivables 81,763 Cash and cash equivalents 5,422,194 ________ 5,503,957 Current liabilities Trade and other payables (138,781) ________ Net current assets 5,365,176 ________ Net assets 6,435,710 ======= Equity Share capital 334,333 Share premium account 5,843,828 Shares to be issued 517,425 Retained earnings (259,876) ________ 6,435,710 Total equity attributable to equity holders of the parent 6,435,710 ======= CONSOLIDATED CASH FLOW Period ended 31 March 2006 31-Mar 2006 £ Cash flows from operating activities Loss before taxation (259,876) Adjustments for: Depreciation of property, plant and equipment 2,666 Financial income (85,304) ________ (342,514) Increase in trade and other receivables (66,329) Increase in trade and other payables 127,253 ________ Net cash used in operating activities (281,590) Cash flows from investing activities Acquisition of subsidiaries net of cash acquired (6,996) Payments to acquire Permits (278,041) Work carried out on Permits (208,090) Purchase of property, plant and equipment (66,554) Interest received 85,304 ________ Net cash used in investing activities (474,377) Cash flows from financing activities Issue of share capital 7,266,470 Costs associated with Share issues (1,088,309) ________ Net cash from financing activities 6,178,161 ________ Net decrease in cash and cash equivalents 5,422,194 Cash and cash equivalents at beginning of the period - ________ Cash and cash equivalents at end of the period 5,422,194 ======= NOTES TO THE INTERIM ACCOUNTS FOR THE PERIOD ENDED 31 MARCH 2006 1 Basis of preparation The interim financial information for the period from incorporation on 16 June 2005 to 31 March 2006 has been prepared in accordance with International Financial Reporting Standards and International Accounting Standards and under the historical cost convention in accordance with the Group's accounting policies which will be published in the Annual Report for the period ended 30 September 2006. The interim financial information complies with IAS 34. As the interim financial information is for the period since incorporation there are no comparative figures to be disclosed. The financial information set out above does not constitute the Company's statutory accounts as defined by section 240 of the Companies Act 1985 and has been neither audited nor reviewed. 2 Taxation There is no current tax charge for the period. The accounts do not include a deferred tax asset in respect of carry forward of unused tax losses as the directors are unable to assess that there will be probable future taxable profits available against which the unused tax losses can be utilised. 3 Valuation of share options Management has concluded that the fair value of the options at the date of grant was not material. 4 The Purchase of Independent Gas Management srl As stated in the Admission document in December 2005, part of the consideration for the acquisition of Independent Gas Management was deferred and dependent on the progress of the share price. In view of the lack of volatility and the large gap between current share prices and the trigger price for additional consideration the Directors do not feel it is necessary at this early stage to provide for any further consideration in the accounts. 5 Intangible assets During the period, £208,090 of company expenditure was capitalised to projects that the company is actively pursuing and for which the licences or permits have been approved. 6 Earnings per share The loss per ordinary share is calculated by reference to the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period as follows: 31-Mar 2006 £ Loss for the period (259,876) Basic weighted average number of shares 15,409,203 Basic loss per share (2) p Diluted weighted average number of shares 15,409,203 Diluted loss per share (2) p 7 Statement of changes in equity 31-Mar 2006 £ Equity shares issued in the period 7,266,470 Less costs associated with share issue taken to share premium account (1,088,309) Less loss for the period attributable to equity holders of the parent (259,876) ________ Total equity attributable to equity holders of the parent 5,918,285 ======= 8 Acquisitions On 19 July 2005 the company acquired the entire issued share capital of Independent Energy Solutions srl and Independent Gas Management srl. Acquisitions of subsidiaries IES IGM Total £ £ £ Trade and other receivables 8,883 6,552 15,435 Trade and other payables (9,011) (2,518) (11,529) Cash and cash equivalents 528 2,745 3,273 ________ ________ ________ 400 6,779 7,179 Consideration: Cash 10,269 - 10,269 Equity shares to be issued in future periods - 517,425 517,425 ________ ________ ________ Total consideration 10,269 517,425 527,694 ________ ________ ________ Goodwill arising on acquisition 9,869 510,646 520,515 ======= ======= ======= Equity shares to be issued in connection with the purchase of Independent Gas Management srl are treated as a non current payable until the shares are issued. The consideration for this purchase was a total of 3,449,500 ordinary shares of which 25% are issuable three years after the date of admission to AIM with the remainder only to be issued upon certain contingent events. Registered office Independent Resources plc The Hollow, Penn Lane, Melbourne, Derbyshire DE73 8EP Telephone: +44 (0)1332 865253 Fax: +44 (0)1332 865111 Email: mailbox@ir-plc.com Commercial office Via Nirone 8, 20123 Milan, Italy Telephone: +39 (02) 3655 5960 Fax: +39 (02) 9998 8778 Email: mailbox@ir-plc.com Technical office Viale Liegi 10, 00198 Roma, Italy Telephone +39 (06) 45490720 Fax +39 (06) 45490721 Email: mailbox@ir-plc.com This information is provided by RNS The company news service from the London Stock Exchange

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