Half Yearly Report/Accounts
Roc Oil Company Limited
26 August 2005
26 August 2005
ROC OIL COMPANY LIMITED ('ROC')
STOCK EXCHANGE RELEASE
STRONG FIRST-HALF 2005 RESULT
KEY FINANCIAL POINTS
• Record $61.3 million net profit after income tax, largely due to the
sale of Saltfleetby Gas Field, effective 31 December 2004, which resulted in
a first-half (1H2005) profit after tax of $80.7 million. The result, which
represents a $74.2 million turnaround compared to the $12.9 million loss for
1H2004, includes $13.4 million exploration expenditure expensed and written
off.
• Final investment decisions made for the Cliff Head Oil Field, offshore
Western Australia and immediately after half year end, the Blane and Enoch
fields in the North Sea.
• Development of the Cliff Head and Chinguetti oilfields progressed on
schedule with first oil expected during 1Q2006 at combined production rates
of 5,000-8,000 BOPD net to ROC.
• Strong financial position maintained with cash and receivables of
$154.9 million and no debt, compared to 30 June 2004 cash and receivables of
$139.3 million and debt of $20.1 million.
• As a result of the $109 million Saltfleetby Gas Field sale, 1H2005
production and sales revenue were substantially lower compared to 1H2004: 38
BOEPD compared to 3,072 BOEPD and $0.4 million compared to $19.0 million,
respectively.
• Development expenditure for the half year of $30 million, primarily
relating to the Cliff Head and Chinguetti oilfields, was substantially
higher than the $0.7 million expended in the corresponding period last year.
• Exploration expenditure for 1H2005 was moderately higher than the
corresponding period last year: $14.9 million compared to $12.4 million.
KEY ACTIVITIES
AUSTRALIA
• Development - Cliff Head Oil Field (ROC: 37.5% and Operator)
The Final Investment Decision was made by the WA-286-P Joint Venture in
March 2005. The budgeted cost to develop the 14 MMBO field is $227 million
including contingencies. At the end of 1H2005 the project remained on budget
and schedule for first oil in 1Q2006.
• Exploration - Carnarvon and Perth Basins
ROC acquired a 20% interest in the BHP Billiton-operated WA-351-P, located
in the deepwater Carnarvon Basin where the high risk/high reward Jacala-1
exploration well is planned to be drilled during 4Q 2005.
Two exploration/appraisal wells were drilled in 1H2005 in the Perth Basin
offshore Western Australia; both were plugged and abandoned as dry holes.
WEST AFRICA
• Development - Chinguetti Oil Field, PSC B (Exclusive Exploitation
Authorisation), Offshore Mauritania (ROC: 3.25%, Operator: Woodside)
The project remains on schedule for start up in 1Q2006 with good progress
achieved on the drilling and completion programme and fit out of the
Floating Production, Storage and Offloading ('FPSO') facility. Due to
changes in the scope of drilling operations Phase 1 project costs are
expected to be in the order of 10% higher than the US$625 million budget.
• Appraisal - Tiof Oil Field, PSC B, Offshore Mauritania (ROC: 3.693%,
Operator: Woodside)
The Tiof-6 appraisal well was drilled and production tested, and flowed at
rates up to 12,400 BOPD before being suspended as a potential future oil
producer.
• Exploration - Cabinda South Block, Onshore Angola (ROC: 60% and Operator)
The combined 2D and 3D seismic survey commenced; the first onshore
exploration activity in Angola for more than 30 years.
UK
• Development - Blane Oil Field and Enoch Oil and Gas Field, North Sea
(ROC unitised interests 12.5% and 12.0% respectively, Operator: Paladin)
Immediately after end 1H2005, the Blane and Enoch fields in the North Sea
were approved for development with gross costs budgeted to be in the order
of £165 million and £75 million respectively.
• Exploration - Onshore (ROC: 100% and Operator)
In January, the Errington-1 exploration well was suspended as a tight gas
discovery. After further evaluation of well data a decision was made to plug
and abandon the well.
CHINA
• Pre-development - Wei-12-8 West Oil Field, Block 22/12, Beibu Gulf (ROC:
19.6% after Government back-in and Operator)
Work continued with regard to the possible development of the field and
commercial negotiations with the relevant government authorities.
CORPORATE
HEDGING
Two oil price hedging contracts were entered into covering approximately 25% of
ROC's share of the total forecast production from Chinguetti and Cliff Head
fields for the relevant periods:
1. Swap arrangement for the 21-month period from 1 April 2006 to 31 December
2007 in relation to 0.9 MMBO at a weighed average Brent oil price of
US$49.58 per barrel.
2. Put Options over 200,000 barrels at US$40 per barrel Brent for the period
1 March 2006 to 31 December 2006.
A-IFRS
Consistent with Australian Accounting Standards ROC adopted A-IFRS. The change
has no effect on ROC's cash flow and business practices or activities.
ARDMORE
During 1Q2005, ROC invested $4.3 million in the Ardmore Project in the UK North
Sea through the provision of secured funds to Acorn North Sea Limited ('ANSL').
On 1 June 2005, without any further investment ROC requested that an
Administrative Receiver be appointed to ANSL due to concerns about the future
viability of the Ardmore project. As a result, ROC expects to recover towards $3
million of its total investment of $11 million of which $1.8 million had been
received by 30 June 2005. The balance is anticipated to be received during
2H2005.
CEO's COMMENTS
Commenting on the financial results, Dr John Doran stated that,
'As a consequence of the strong 1H2005 financial result, largely driven by the
very profitable sale of the Saltfleetby Gas Field at the end of 2004, ROC was
able to self-fund, with a considerable degree of comfort, substantial
development expenditure at Chinguetti and Cliff Head as well as a global
exploration and appraisal drilling programme which will continue well into 2006.
ROC's activities during 1H2005 illustrate the breadth and depth of the Company's
portfolio and the benefits of the balanced strategy that it is implementing with
regard to its four core areas: Australia, West Africa, UK and China. With four
oilfields being developed in three of those areas and an active exploration
programme, which includes a number of potential company-makers, underway in all
four areas, the scene has been set for a very interesting future.'
For a copy of ROC's complete Half Yearly Report, please see our website:
http://www.rocoil.com.au/Pages/Company_Reports/company-reports.html
Michelle Manook For further information please contact:
General Manager - Corporate Affairs Dr John Doran on
Tel: +61-2-8356-2000
Fax: +61-2-9380-2635
Email: jdoran@rocoil.com.au
Or visit ROC's website: www.rocoil.com.au
Dr Kevin Hird
General Manager Business Development
Tel: +44 (0)207 586 7935
Fax: +44 (0)207 722 3919
Email: khird@rocoil.com.au
Nick Lambert
Bell Pottinger Corporate & Financial
Tel: +44 (0)207 861 3232
This information is provided by RNS
The company news service from the London Stock Exchange
GGUL