AIM: XTR
Xtract Energy Plc
Interim results
For the six months ended 30 June 2011
Xtract Energy Plc ("Xtract" or "the Company") announces its unaudited interim results for the six months ended 30 June 2011.
Financial Highlights
· Net loss of £1.2 million (30 June 2010: £10.3 million loss)
· Cash of £4.58 million (31 December 2010: £8.766 million)
· Net assets of £8.035 million (31 December 2010: £8.329 million)
Operational Highlights
· Elko Energy AS - Awarded a new exploration licence, 01/11, of approximately 1,900 sq. kms. Immediately to the west of the 02/05 licence area.
· Elko Energy AS - Well location selected in Denmark. The well will be known as Luna and is expected to spud in Q4 2011.
· Extrem Energy AS - Heads of Agreement signed between Xtract, Merty, Extrem and the Yoldemir family whereby Xtract has disposed of its 50% holding in Extrem Energy AS.
· Worley Parsons contracted to provide a technical study on various oil shale extraction techniques
· Xtract offers to acquire the issued and outstanding common stock in Elko Energy Inc. that it does not already own in exchange for new ordinary shares in Xtract. Xtract shares suspended on 21st June 2011.
· Dr. George Watkins appointed as Non-Executive Chairman following the resignation of Mr. John Newton.
Post-period Highlights
· Acquisition of the remaining Elko Energy Inc share capital satisfied by the issuance of 350,245,343 new ordinary shares in Xtract
· Completion of sale of Xtract's 50% holding in Extrem Energy AS
· Placing of 240,000,000 shares at a price of 1.25p each to raise £3,000,000 before expenses.
· Equity Line Facility established for a maximum of £12,500,000.
· Trading suspension lifted on 26th August 2011.
Peter Moir, Chief Executive of Xtract commented, "We are very happy to have now completed the acquisition of Elko Energy Inc. and the disposal of our interest in Extrem Energy AS. These transactions allow management to more effectively focus on core business areas moving forward. We are excited about our future prospects, particularly in the North Sea where we have two wells being drilled in the next quarter".
Enquiries please contact:
Xtract Energy |
Peter Moir, CEO Alan Hume Group FD
|
+44 (0)137 2371071 +44 (0)1372 371071 |
Cenkos Securities Plc |
Jon Fitzpatrick Beth McKiernan |
+44 (0)207 397 8900 +44 (0)131 220 6939 |
Financial Dynamics |
Billy Clegg Edward Westropp Alex Beagley |
+44 (0)20 7831 3113 |
CHAIRMAN'S REVIEW
This is the first interim report under our new accounting reference period and the first report since I joined the Xtract Board as Non-Executive Chairman. I am pleased to report that the first six months of 2011 have resulted in a number of positive activities focusing on rationalization of the Company's interests and the change from an investment company to an operating and trading company.
Specifically, in the period under review, the company made an offer for the remainder of the Elko Energy Inc shares which it did not already own and signed a Heads of Agreement to facilitate an exit from the Extrem Energy AS JV in Turkey. Subsequent to the reporting date both these transactions have completed.
As a result of making the offer to acquire the remaining shares of Elko Energy Inc, our existing admission to AIM as an investment company was no longer valid. The company's shares were suspended from trading on AIM on the date of the Elko offer, being 21st June 2011. Subsequent to the reporting period, the company issued a new Admission Document and applied for re-admission to AIM as an operating and trading company. This process, including the Elko acquisition, was completed on 12 September 2011, and the expanded company was re-admitted to trading on 13 September 2011.
As a result of this activity, Xtract can look forward to participating in two wells to be drilled later in 2011, one in Denmark and one in the Netherlands.
Elko Energy Inc ("Elko")
In offshore Denmark, Elko holds a 33% working interest in two exploration licences with a combined area of 3,638 sq. km. These licences offer P50 un-risked net prospective resources of 747 million barrels of oil (independently evaluated by TRACS International in the Competent Persons Report dated May 2011). Elko's partners in the licences are the Norwegian company Noreco with a 47% working interest and the Danish government's North Sea Fund (DNSF) with 20%.
In January 2011, the licence group, (Elko, Noreco and DNSF) were awarded the 01/11 licence area covering 1,900 sq. km. immediately to the west of the existing 02/05 licence. The 02/05 licence group relinquished 3,645 sq. km. of the 02/05 licence as part of this award. The combined area of the two licences is now 3,638 sq. km.
In March 2011 the sales transaction to Noreco completed and Elko Energy AS received a contribution to past costs of approximately $1m (£0.7m).
The partners have already selected a location for the first well, to be called Luna. This well will be drilled to test the Rotleigendes play in an optimum position in terms of reservoir quality, thickness and hydrocarbon charge for the combined prospective area. The Luna well is located in a down faulted half graben with increased chance of having reservoir preserved and a higher chance of successful hydrocarbon charge, being closer to the prolific Danish Central Graben kitchen area.
In the Netherlands offshore, Elko Energy BV and Elko Exploration BV hold royalty interests on the P1 and P2 blocks operated by Chevron. Since acquiring their interest in these licences from Elko, Chevron has assigned a 12% interest in both blocks to TAQA Energy B.V. ("TAQA") while retaining a 48 % interest themselves.
Chevron plan to drill an appraisal well on block P2 in the fourth quarter of 2011. This P2-10 well, to be drilled by the Noble Byron Welliver jack up drilling rig, will target an existing gas discovery on the P2 block. Its main objective is to evaluate commercial hydrocarbon flow rates from an extended reach horizontal well within the Rotleigendes sandstone reservoir. The well program is expected to be of 100 days duration.
Extrem Energy AS ("Extrem")
Extrem is a Turkish joint stock company with a portfolio of six licence interests including 100% interests in offshore licences at Candarli Bay and in the Sea of Marmara and onshore licences at Edirne and Siraseki plus an 80% interest in an onshore licence at Alasehir/Sarikiz.
In May 2011, Xtract announced that a Heads of Agreement had been signed between Xtract, Extrem, Merty and the Yoldemir family, whereby Merty intends to acquire Xtract's 50% share ownership of Extrem Energy AS. The terms of the agreement include a completion payment to Xtract of $100,000 (£62,000) (received on 24 August 2011) as well as additional cash payments triggered by any future licence farm outs by Extreme, and also Gross Overriding Royalty interests in future revenues from successful exploration and production of hydrocarbons from the licences plus a processing royalty if the existing processing plant is utilized.
This transaction allows Xtract to maintain an interest in the upside of any hydrocarbon discoveries whilst terminating the contribution of capital to this particular business venture.
Other Interests
Xtract continues to hold a 25% interest in former subsidiary Zhibek Resources Ltd ("Zhibek") following the farm-out of the major share to Santos International Holdings Pty Ltd in October 2008. Seismic work over Zhibek's Tash Kumyr licence area in the Kyrgyz Republic has been completed and interpreted by Santos as operator. Santos is currently evaluating drilling rigs to fulfil the requirement to drill an obligation well on the licence. Further details will become available once drilling plans have been agreed with the Kyrgyz authorities.
Through its subsidiary Xtract Oil Ltd ("XOL"), the Company continues to maintain mineral rights over approximately 2 billion barrels of oil shale contingent resources at Julia Creek in Queensland, Australia. By maintaining the mineral rights at limited cash expense, Xtract retains the option to exploit the resource when investment conditions are more supportive. During the reporting period Worley Parsons were commissioned to prepare a technical study on oil shale extraction methodologies. This report is designed to assist management in determining the most appropriate method to realise value from this asset.
During the first two months of the reporting period all 60,000,000 outstanding warrants in Xtract were exercised at 2.5p. This issue of an additional 60,000,000 ordinary shares in the Company raised £1,500,000.
Looking to the future, in addition to identifying additional exploration opportunities, Xtract also has a desire to invest in oil and gas development projects. The objective is to seek assets which because of their size or location are less attractive to larger companies but which, nevertheless, have the potential to generate high returns for our shareholders.
Subsequent Events
I was very happy to see the transaction to acquire the Elko shares complete on 13th September with the enlarged Xtract group returning to AIM as a trading company. At the same time the placing of 240,000,000 shares at 1.25p became unconditional as did the agreement with YA Global Master SPV to provide Xtract with a £12.5m Equity Line Facility.
The combination of these transactions and facilities provides funds for immediate working capital requirements as well as providing further flexibility of funding for possible future working capital requirements.
The increase in the Elko holding demonstrates the confidence management place in the assets of the Company.
Dr. George Watkins
Non-Executive Chairman
Note
XOL
The information in this announcement relating to XOL's resources estimates has been provided using the Petroleum Resources Management system endorsed by The Society of Petroleum Engineers referred to as the SPE-PRMS and has been reviewed by Dr John E. Shirley, Managing Director of XOL. Dr. Shirley has a BSc and PhD in Geophysics from the University of Tasmania; over 40 years experience in the resources and energy sector and is a member of the Society of Petroleum Engineers.
Elko
The information in this announcement relating to the resources of Elko in Denmark has been supplied by TRACS International in their Competent Persons Report of May 2011..
Definitions
"mbbl" - million barrels
"P50" - midcase scenario in relation to reserve expectations
"mmscf/d" - million standard cubic feet per day
Xtract Energy Plc
Consolidated Income Statement
For the six months ended 30 June 2011
|
|
|
Six months ended |
|
|
Notes |
|
30 June 2011 Unaudited £'000 |
30 June 2010 Unaudited £'000 |
Continuing operations |
|
|
|
|
Administrative and operating expenses |
|
|
(1,619) |
(1,968) |
Share of results of associates |
8 |
|
20 |
(464) |
Share of results of joint venture |
|
|
- |
(9,578) |
|
|
|
|
|
Operating loss |
|
|
(1,599) |
(12,010) |
|
|
|
|
|
Investment revenue |
3 |
|
36 |
71 |
Finance income / (costs) |
|
|
383 |
(1,243) |
Other gains and losses |
3 |
|
7 |
1,449 |
|
|
|
|
|
Loss before tax |
|
|
(1,173) |
(11,733) |
|
|
|
|
|
Tax credit |
|
|
- |
1,384 |
|
|
|
|
|
Loss for the period from continuing operations |
|
|
(1,173) |
(10,349) |
|
|
|
|
|
Loss for the period |
|
|
(1,173) |
(10,349) |
|
|
|
|
|
Attributable to: |
|
|
|
|
Equity holders of the parent |
|
|
(1,022) |
(9,607) |
Non-controlling interest |
|
|
(151) |
(742) |
|
|
|
(1,173) |
(10,349) |
|
|
|
|
|
|
|
|
|
|
Net loss per share |
|
|
|
|
|
|
|
|
|
Basic (pence) |
5 |
|
(0.11) |
(1.13) |
|
|
|
|
|
Diluted (pence) |
5 |
|
(0.11) |
(1.13) |
Xtract Energy Plc
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2011
|
|
Six months ended |
|
|
|
30 June 2011 Unaudited £'000 |
30 June 2010 Unaudited £'000 |
|
|
|
|
Loss for the period |
|
(1,173) |
(10,349) |
|
|
|
|
(Loss)/gain on revaluation of available-for-sale investments taken to equity |
|
(47) |
1,460 |
|
|
|
|
Transferred to income statement on sale of available-for-sale investments |
|
- |
(1,550) |
|
|
|
|
Movements in share based payments reserve of associates taken to equity |
|
- |
(277) |
|
|
|
|
Exchange differences on translation of foreign operations |
|
(574) |
1,169 |
|
|
|
|
|
|
|
|
Other comprehensive (loss)/gain for the period |
|
(621) |
802 |
|
|
|
|
Total comprehensive loss for the period |
|
(1,794) |
(9,547) |
|
|
|
|
Attributable to: |
|
|
|
Equity holders of the parent |
|
(1,392) |
(8,915) |
Non-controlling interest |
|
(402) |
(632) |
|
|
(1,794) |
(9,547) |
Xtract Energy Plc
Consolidated Statement of Financial Position
As at 30 June 2011
|
Notes |
|
30 June 2011 Unaudited £'000 |
31 December 2010 Audited £'000 |
|
|
|
|
|
Non-current assets |
|
|
|
|
Intangible assets |
6 |
|
2,195 |
2,047 |
Property, plant and equipment |
|
|
5 |
4 |
Investments in associates |
8 |
|
426 |
400 |
Investment in joint venture |
9 |
|
- |
65 |
Financial assets |
11 |
|
450 |
497 |
Deferred consideration |
|
|
243 |
291 |
|
|
|
3,319 |
3,304 |
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
Trade and other receivables |
|
|
3,054 |
237 |
Held for sale |
10 |
|
62 |
- |
Cash and cash equivalents |
|
|
4,576 |
8,766 |
|
|
|
7,692 |
9,003 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
11,011 |
12,307 |
|
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
|
1,147 |
556 |
Current tax liabilities |
|
|
1,371 |
2,951 |
|
|
|
2,518 |
3,507 |
|
|
|
|
|
|
|
|
|
|
Net current assets |
|
|
5,174 |
5,496 |
|
|
|
|
|
Non-current liabilities |
|
|
|
|
Deferred tax liabilities |
|
|
458 |
471 |
|
|
|
|
|
Total liabilities |
|
|
2,976 |
3,978 |
|
|
|
|
|
Net assets |
|
|
8,035 |
8,329 |
|
|
|
|
|
Xtract Energy Plc
Consolidated Statement of Financial Position (continued)
As at 30 June 2011
|
Notes |
|
30 June 2011 Unaudited £'000 |
31 December 2010 Audited £'000 |
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
12 |
|
915 |
855 |
Share premium account |
|
|
27,446 |
26,006 |
Warrant reserve |
|
|
- |
538 |
Share-based payments reserve |
|
|
559 |
564 |
Available-for-sale investment reserve |
|
|
(140) |
(93) |
Foreign currency translation reserve |
|
|
538 |
861 |
Accumulated losses |
|
|
(25,236) |
(24,757) |
|
|
|
|
|
Equity attributable to equity holders of the parent |
|
|
4,082 |
3,974 |
|
|
|
|
|
Minority interest |
|
|
3,953 |
4,355 |
|
|
|
|
|
Total equity |
|
|
8,035 |
8,329 |
|
|
|
|
|
Xtract Energy Plc
Consolidated Statement of Changes in Equity
|
Share Capital £'000 |
Share premium account £'000 |
Warrant reserve £'000 |
Share-based payments reserve £'000 |
Available-for-sale investment reserve £'000 |
Foreign currency translation reserve £'000 |
Retained Deficit £'000 |
Non-controlling interest £'000 |
Total Equity £'000 |
As at 31 December 2009 |
812 |
25,509 |
- |
1,446 |
(309) |
1,390 |
(14,989) |
- |
13,859 |
Issue of warrants |
- |
- |
538 |
- |
- |
- |
- |
- |
538 |
Gain on revaluation of available-for-sale investments |
- |
- |
- |
- |
1,460 |
- |
- |
- |
1,460 |
Transfer of available-for-sale reserves to income statement on disposal |
- |
- |
- |
- |
(1,550) |
- |
- |
- |
(1,550) |
Issue of share capital |
43 |
497 |
- |
- |
- |
- |
- |
- |
540 |
Movement in share based payment reserve of associate |
- |
- |
- |
461 |
- |
- |
- |
- |
461 |
Movement in share based payment reserve of associate |
- |
- |
- |
(277) |
- |
- |
- |
- |
(277) |
Transfer of share based payment reserves of associates on disposal |
- |
- |
- |
(807) |
- |
- |
807 |
- |
- |
Foreign currency translation difference |
- |
- |
- |
- |
- |
1,059 |
- |
110 |
1,169 |
Associate becoming subsidiary |
- |
- |
- |
- |
- |
- |
- |
4,610 |
4,610 |
Transfer of associate's FCTR to income statement on disposal |
- |
- |
- |
- |
- |
(745) |
- |
- |
(745) |
Loss for the period |
- |
- |
- |
- |
- |
- |
(9,607) |
(742) |
(10,349) |
As at 30 June 2010 |
855 |
26,006 |
538 |
823 |
(399) |
1,704 |
(23,789) |
3,978 |
9,716 |
Gain on revaluation of available-for-sale investments |
- |
- |
- |
- |
306 |
- |
- |
- |
306 |
Share-based payment expense |
- |
- |
- |
301 |
- |
- |
- |
135 |
436 |
Other equity movements |
- |
- |
- |
(560) |
- |
- |
560 |
- |
- |
Loss for period |
- |
- |
- |
- |
- |
- |
(1,528) |
134 |
(1,394) |
Foreign currency translation difference |
- |
- |
- |
- |
- |
(843) |
- |
108 |
(735) |
As at 31 December 2010 |
855 |
26,006 |
538 |
564 |
(93) |
861 |
(24,757) |
4,355 |
8,329 |
Warrant exercise |
60 |
1,440 |
(538) |
- |
- |
- |
538 |
- |
1,500 |
Share options lapse |
- |
- |
- |
(5) |
- |
- |
5 |
- |
- |
Loss on revaluation of available-for-sale investments |
- |
- |
- |
- |
(47) |
- |
- |
- |
(47) |
Foreign currency translation difference |
- |
- |
- |
- |
- |
(323) |
- |
(251) |
(574) |
Loss for the period |
- |
- |
- |
- |
- |
- |
(1,022) |
(151) |
(1,173) |
As at 30 June 2011 |
915 |
27,446 |
- |
559 |
(140) |
538 |
(25,236) |
3,953 |
8,035 |
Xtract Energy Plc
Consolidated Cash Flow Statement
For the six months period ended 30 June 2011
|
|
6 month period ended 30 June 2011 Unaudited £'000 |
6 month period ended 30 June 2010 Unaudited £'000 |
|
|
|
|
|
|
Net cash (used) in operating activities |
13 |
(5,421) |
(2,198) |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
|
Interest received |
|
36 |
71 |
|
Government grants |
|
- |
11 |
|
Acquisition of intangible assets |
|
(803) |
(54) |
|
Disposal of intangible assets |
|
655 |
- |
|
Purchase of property, plant and equipment |
|
- |
(1) |
|
Disposal of available-for-sale investments |
|
- |
(630) |
|
Purchase of joint venture |
|
- |
(3,911) |
|
Acquisition of subsidiaries, net of cash acquired |
|
- |
4,784 |
|
|
|
|
|
|
Net cash (used in)/ from investing activities |
|
(112) |
270 |
|
|
|
|
|
|
Financing activities |
|
|
|
|
Proceeds on issue of shares and warrants |
|
1,500 |
- |
|
Share issue expenses |
|
- |
1 |
|
|
|
|
|
|
Net cash from financing activities |
|
1,500 |
1 |
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
|
(4,033) |
(1,927) |
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
8,766 |
7,378 |
|
|
|
|
|
|
Effect of foreign exchange rate changes |
|
(157) |
1,418 |
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
4,576 |
6,869 |
|
Xtract Energy Plc
Notes to the interim financial statements
For the six months ended 30 June 2011
The interim financial information presented herein has been neither audited nor reviewed. The information for the period ended 31 December 2010 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 but has been derived from those accounts. The auditors' report on those accounts was not qualified and did not contain statements under section 498 (2) or (3) of the Companies Act 2006 but did draw attention by way of emphasis to the significant uncertainty around the going concern assumption.
The interim consolidated financial statements of the Group for the six months ended 30 June 2011 were authorised for issue in accordance with a resolution of the directors on 22 September 2011.
Xtract Energy Plc is a company incorporated in Great Britain under the Companies Act 2006. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange.
Xtract Energy Plc prepares its annual financial statements on the basis of International Financial Reporting Standards (IFRSs) as adopted for use by the European Union (EU). The interim financial information presented herein has been prepared in accordance with IAS 34 'Interim Financial Reporting' and with the accounting policies expected to be used in preparing the financial statements for the year ending 31 December 2011 which do not differ significantly from those used for the 2010 Group financial statements.
The interim financial information is presented in pound sterling and all values are rounded to the nearest thousand pounds (£'000) unless otherwise stated.
An analysis of the Group's other gains are as follows:
|
Six months ended 30 June 2011 |
Six months ended 30 June 2010 |
|
£'000 |
£'000 |
Investment revenue |
|
|
Interest on bank deposits |
36 |
71 |
|
|
|
Other gains and losses |
|
|
Gains on disposals of associates |
- |
78 |
Transfer of foreign currency translation reserve on disposal of associates |
- |
745 |
Disposal of available for sale investments |
- |
604 |
Other income |
7 |
11 |
Research and development grants |
- |
11 |
|
7 |
1,449 |
4. Segment information
Business segments
For management purposes, the Group is currently organised into two operating divisions - oil & gas exploration, evaluation and development and oil shale exploitation. These divisions are the basis on which the Group reports its primary segment information.
Principal activities are as follows:
· Oil & gas exploration, evaluation and development - of the Group's interests in Turkey, the Netherlands, Denmark and the Kyrgyz Republic.
· Oil shale exploitation - of the Group's interests in Queensland, Australia and Tarfaya, Morocco.
· Investment and other - in various listed resource companies.
Segment information about businesses is presented below.
6 month period ended 30 June 2011
|
Oil & Gas exploration and production |
Oil shale exploitation |
Investment and other |
Consolidated |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Segment revenue |
|
|
|
|
Administrative and operating expenses |
(711) |
(59) |
(849) |
(1,619) |
Share of results of associates |
20 |
- |
- |
20 |
Share of results of joint venture |
- |
- |
- |
- |
Segment result |
(691) |
(59) |
(849) |
(1,599) |
|
|
|
|
|
Investment revenue |
9 |
1 |
26 |
36 |
Finance costs |
373 |
- |
10 |
383 |
Other gains and losses |
5 |
- |
2 |
7 |
|
|
|
|
|
(Loss) before tax |
(304) |
(58) |
(811) |
(1,173) |
|
|
|
|
|
Tax credit |
|
|
|
- |
|
|
|
|
|
Loss for the period |
|
|
|
(1,173) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Segment information
Business segments (continued)
6 month period ended 30 June 2011 (continued)
|
Oil & Gas exploration and production |
Oil shale exploitation |
Investment and other |
Consolidated |
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
Capital additions - property, plant and equipment |
5 |
- |
- |
5 |
Exploration and evaluation additions |
803 |
- |
- |
803 |
Depreciation and amortisation |
(2) |
- |
(2) |
(4) |
Balance sheet |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
Intangible assets |
2,195 |
- |
- |
2,195 |
Property, plant and equipment |
4 |
- |
1 |
5 |
Interests in associates |
426 |
- |
- |
426 |
Held for sale |
62 |
- |
- |
62 |
Financial assets |
7,084 |
36 |
960 |
8,080 |
Deferred consideration |
243 |
- |
- |
243 |
|
|
|
|
|
Consolidated total assets |
|
|
|
11,011 |
|
|
|
|
|
Liabilities |
|
|
|
|
Financial liabilities |
738 |
3 |
1,777 |
2,518 |
Deferred tax liability |
- |
- |
458 |
458 |
|
|
|
|
|
Consolidated total liabilities |
|
|
|
2,976 |
|
|
|
|
|
4. Segment information
Business segments (continued)
6 month period ended 30 June 2010
|
Oil & Gas exploration and production |
Oil shale exploitation |
Investment and other |
Consolidated |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Segment revenue |
|
|
|
|
Administrative and operating expenses |
(695) |
(104) |
(1,169) |
(1,968) |
Share of results of associates |
(464) |
- |
- |
(464) |
Share of results of joint venture |
(9,578) |
- |
- |
(9,578) |
Segment result |
(10,737) |
(104) |
(1,169) |
(12,010) |
|
|
|
|
|
Investment revenue |
3 |
3 |
65 |
71 |
Finance costs |
(798) |
- |
(445) |
(1,243) |
Other gains and losses |
9 |
11 |
1,429 |
1,449 |
|
|
|
|
|
Loss before tax |
(11,523) |
(90) |
(120) |
(11,733) |
|
|
|
|
|
Tax expense |
|
|
|
1,384 |
|
|
|
|
|
Loss for the period |
|
|
|
(10,349) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Segment information
Business segments (continued)
6 month period ended 30 June 2010 (continued)
|
Oil & Gas exploration and production |
Oil shale exploitation |
Investment and other |
Consolidated |
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
Capital additions - property, plant and equipment |
3 |
- |
- |
3 |
Exploration and evaluation additions |
54 |
- |
- |
54 |
Depreciation and amortisation |
2 |
14 |
2 |
18 |
Balance sheet |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
Intangible assets |
4,407 |
- |
- |
4,407 |
Property, plant and equipment |
3 |
- |
5 |
8 |
Interests in associates |
445 |
- |
- |
445 |
Interest in joint venture |
2,322 |
- |
- |
2,322 |
Financial assets |
4,912 |
111 |
2,324 |
7,347 |
Deferred consideration |
297 |
- |
- |
297 |
|
|
|
|
|
Consolidated total assets |
|
|
|
14,826 |
|
|
|
|
|
Liabilities |
|
|
|
|
Financial liabilities |
290 |
2 |
4347 |
4,639 |
Unallocated corporate liabilities |
- |
- |
- |
- |
Deferred tax liabilities |
- |
- |
471 |
471 |
|
|
|
|
|
Consolidated total liabilities |
|
|
|
5,110 |
|
|
|
|
|
The calculation of the basic and diluted loss per share is based on the following data:
|
|
||
Six months ended |
|
||
Losses
|
30 June 2011 £'000 |
30 June 2010 |
|
|
|
|
|
Losses for the purposes of basic earnings per share being net loss attributable to equity holders of the parent |
(1,022) |
(9,607) |
|
|
|
|
|
Number of shares |
|
|
|
Weighted average number of ordinary shares for the purposes of basic earnings per share |
906,014,750 |
847,201,490 |
|
|
|
|
|
Effect of dilutive potential ordinary shares - options and warrants |
- |
- |
|
|
|
|
|
Weighted average number of ordinary shares for the purposes of diluted earnings per share |
906,014,750 |
847,201,490 |
|
|
|
|
|
Where a loss has occurred, basic and diluted earnings per share are the same because the outstanding share options and warrants are anti-dilutive.
Details of the Group's intangible assets as at 30 June 2011 are as follows:
|
30 June 2011 £'000 |
30 June 2010 |
31 December 2010 £'000 |
|
|
|
|
Opening balance |
2,047 |
- |
4,407 |
Acquisition of subsidiary |
- |
4,353 |
- |
Additions |
803 |
54 |
25 |
Disposals* |
(655) |
- |
(2,438) |
Amortisation Effects of foreign currency translation |
- - |
- - |
(1) 54 |
|
2,195 |
4,407 |
2,047 |
|
|
|
|
*The carrying value above of £2,195,000 all relates to Licences 02/05 and 01/11 offshore Denmark which the Group holds through its Danish subsidiary, Elko Energy A/S.
An agreement with the Norwegian Energy Company ASA (Noreco), wherein Noreco would farm in to the 02/05 licence with a 47% working interest and Elko Energy A/S would retain 33% and the remaining 20% would continue to be held by the Danish North Sea Fund (DNSF) was completed on 23 March 2011. Noreco paid Elko circa US$1.1 million cash on its disposal for its share of past costs.
Details of the Group's subsidiaries as at 30 June 2011 are as follows:
Name |
Place of incorporation |
Date controlling interest acquired |
Proportion of ownership & voting power % |
Principal activity |
Sermines de Mexico S.A. de C.V. |
Mexico |
08/08/2005 |
100 |
Mining exploration |
Xtract Oil Limited |
Australia |
17/02/2006 |
100 |
Mining exploration and technology development |
Xtract Technologies Limited |
Australia |
27/09/2005 |
100 |
Dormant |
Julia Creek Petroleum Limited |
Australia |
22/09/2005 |
100 |
Dormant |
Xtract International Limited |
Great Britain |
15/11/2006 |
100 |
Holding Company |
Xtract Energy Spain SL |
Spain |
10/09/2009 |
100 |
Holding Company |
Xtract Energy Holdings Limited |
Great Britain |
03/12/2007 |
100 |
Holding Company |
Xtract Energy (Oil Shale) Morocco SA |
Morocco |
23/07/2008 |
70 |
Mining exploration |
Elko Energy Inc |
Canada |
11/01/2010 |
49.97 |
Oil & Gas exploration and evaluation |
Elko Energy International |
Cayman Islands |
11/01/2010 |
49.97 |
Holding Company |
Elko MEA |
Cayman Islands |
11/01/2010 |
49.97 |
Holding Company |
Elko Americas |
Cayman Islands |
11/01/2010 |
49.97 |
Holding Company |
Elko Europe |
Cayman Islands |
11/01/2010 |
49.97 |
Holding Company |
Elko (UK) Limited |
Great Britain |
11/01/2010 |
49.97 |
Holding Company |
Elko Energy Business Services Ltd |
Great Britain |
11/01/2010 |
49.97 |
Administration services |
Elko Energy A/S |
Denmark |
11/01/2010 |
49.97 |
Oil & Gas exploration and evaluation |
RPK Finance & Holdings BV |
The Netherlands |
11/01/2010 |
49.97 |
Holding Company |
Elko Energy BV |
The Netherlands |
11/01/2010 |
49.97 |
Oil & Gas exploration and evaluation |
Elko Exploration BV |
The Netherlands |
11/01/2010 |
49.97 |
Oil & Gas exploration and evaluation |
All of these subsidiaries have been consolidated for the period of ownership.
On 7 February 2011, Elko Energy Inc issued 100,000 ordinary shares following an exercise of options at an exercise prices of CAD$0.20. This increase in the number of ordinary shares of Elko Energy Inc reduced Xtract's proportion of ownership from 50.02% to 49.97%. At 30 June 2011, the directors determined that this did not constitute a loss of de facto control as Xtract continued to govern the financial and operating policies of Elko due to the joint management of both companies and the dispersed nature of the remaining shareholdings.
Details of the Group's associates as at 30 June 2011 are as follows:
|
30 June 2011 £'000 |
30 June 2010 |
31 December 2010 £'000 |
|
|
|
|
Opening balance |
400 |
10,684 |
445 |
Investment in associate |
- |
424 |
- |
Release of deferred consideration |
48 |
32 |
6 |
Share of associates' profit/(losses) for the period |
20 |
(464) |
(39) |
Share of associates' share-based-payments reserve |
- |
184 |
- |
Transferred to joint venture |
- |
(7,019) |
- |
Transferred to subsidiary |
- |
(3,395) |
- |
Gain on disposal of associate |
- |
78 |
- |
Share of associates' foreign currency translation reserve |
(42) |
(79) |
(12) |
|
|
|
|
Closing balance |
426 |
445 |
400 |
|
|
|
|
Name |
Place of Incorporation and Operation |
Date associate interest acquired |
Proportion of ownership & voting power held % |
Principal Activity |
Zhibek Resources Limited |
Great Britain/ Kyrgyzstan |
17/11/08 |
25 |
Oil & gas exploration and production |
Details of the Group's joint venture as at 30 June 2011 are as follows:
|
30 June 2011 £'000 |
30 June 2010 |
31 December 2010 £'000 |
|
|
|
|
Opening balance |
65 |
7,019 |
2,322 |
Investment in joint venture |
- |
4,613 |
- |
Share of joint venture losses |
- |
(9,578) |
(83) |
Exchange translation |
- |
268 |
(9) |
Transfer to held for sale |
(65) |
- |
- |
Impairment of investment in joint venture |
- |
- |
(2,165) |
|
|
|
|
Closing balance |
- |
2,322 |
65 |
|
|
|
|
Name |
Place of Incorporation and Operation |
Date associate interest acquired |
Head of terms agreement signed to dispose of interest |
Proportion of ownership & voting power held % |
Principal Activity |
Extrem Energy A.S. |
Turkey |
15/02/2010 |
04/05/2011 |
50 |
Oil & gas exploration and production |
Details of the Group's assets held for sale are detailed below:
|
30 June 2011 £'000 |
30 June 2010 |
31 December 2010 £'000 |
Opening balance |
- |
- |
- |
Transfer from joint venture |
65 |
- |
- |
Exchange translation |
(3) |
- |
- |
Closing balance |
62 |
- |
- |
On 4 May 2011 a Heads of Agreement was signed between Xtract, Extrem, Merty and the Yoldemir family, whereby Merty intends to acquire Xtract's 50% share ownership in Extrem giving Merty and the Yoldemir family complete control of Extrem Energy AS. The Group's joint venture in Turkey has therefore been reclassified to held for sale from that date.
The consideration for the sale of Extrem A.S comprises a completion payment of US$100,000, farm in success payments per licence, processing royalties and gross overriding royalty interest payments.
The carrying value of Extrem A.S reflects the firm cash consideration arising under the Heads of Agreement, US$100,000 (£62,000 at 30 June 2011). This transaction completed subsequent to the period end, as disclosed in Note 15.
Details of the Group's available-for-sale investments as at 30 June 2011 are as follows:
|
30 June 2011 £'000 |
30 June 2010 |
31 December 2010 £'000 |
|
|
|
|
At beginning of the period |
497 |
281 |
191 |
Disposed of during the period |
|
(1,550) |
|
Movement in fair value |
(47) |
1,460 |
306 |
|
|
|
|
At the end of the period |
450 |
191 |
497 |
|
|
|
|
Available-for-sale investments comprise the Group's investment in listed securities, which are held by the Group as strategic investments.
12. Share capital
|
As at 30 June 2011 Number |
As at 30 June 2010 Number |
As at 31 December 2010 Number |
Issued and fully paid ordinary shares of £0.1p each |
914,965,026 |
854,965,026 |
854,965,026 |
|
|
|
|
|
£ |
£ |
£ |
Issued and fully paid ordinary shares of £0.1p each |
914,965 |
854,965 |
854,965 |
|
6 months period ended 30 June 2011 £'000 |
6 months period ended 30 June 2010 £'000 |
|
|
|
|
|
Loss for the period |
(1,173) |
(10,349) |
|
|
|
|
|
Adjustments for: |
|
|
|
Share of results of associates |
(20) |
464 |
|
Share of loss and impairment of joint venture |
- |
9,578 |
|
Investment revenue |
(36) |
(71) |
|
Other (gains) |
(7) |
(1,438) |
|
Income tax (credit) |
- |
(1,384) |
|
Interest expense/(income) |
11 |
(171) |
|
Government grants |
- |
(11) |
|
Depreciation of property, plant and equipment |
4 |
18 |
|
Amortisation of intangibles |
- |
- |
|
Share-based payments expense |
- |
- |
|
|
|
|
|
Operating cash flows before movements in working capital |
(1,221) |
(3,364) |
|
(Increase)/decrease in receivables |
(2,817) |
437 |
|
Decrease in payables |
(989) |
(684) |
|
|
|
|
|
Cash used in operations |
(5,027) |
(3,611) |
|
|
|
|
|
Income taxes paid |
- |
|
|
Interest expenses |
- |
|
|
|
|
|
|
Foreign currency exchange differences |
(394) |
1,413 |
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
(5,421) |
(2,198) |
|
|
|
|
|
14. Going concern
The Group is not currently generating revenue from its operations, however it has just completed a placing of 240,000,000 new shares raising £3 million gross in addition to reaching an agreement with YA Global Master SPV to provide potential future funding of up to £12.5 million from an equity line facility over a period of up to three years.
Fund draw downs from the equity line facility are dependent on the share price and the volume of Xtract shares traded in any given period. In addition each advance cannot exceed the greater of £2 million, an amount that would result in Y A Global Master SPV holding more than 2.99% of the entire issued ordinary share capital of Xtract, or an amount equal to 300% of the average daily traded value for each of the 10 trading days prior to the Company submitting notice for an advance.
The Group's forecast and projections indicate that these financial resources should enable the group to make further investment in its existing and new projects in line with the Group's strategy as well as settle its current and future liabilities when due and meet its ongoing overheads without requiring access to additional funds in the next 12 months.
The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the interim financial statements.
On 12 July 2011 Xtract Energy Plc announced its audited results for the 6 months ended 31 December 2010 after changing its financial year end from 30 June to 31 December.
On 12 July 2011 Xtract Energy Plc sold its entire holding of Lochard Energy Group Plc shares (previously Rheochem Plc) receiving proceeds of £448,978 and realising a loss of £140,895.
On 4 August 2011 Xtract Energy Plc announced that all resolutions proposed at Elko Energy Inc's annual and special meetings were duly passed. This included the approval of the Plan of Arrangement with Xtract Energy Plc and Xtract International Limited whereby Xtract Energy proposed to acquire all the outstanding common shares of Elko not already owned.
On 8 August 2011 Xtract Energy Plc announced that all resolutions proposed at Xtract Energy's Annual General Meeting as listed below were duly passed:
1. the receipt and adoption of the Company's accounts for the 6 months ended 31 December 2010;
2. the re-appointment of Deloitte LLP as the Company's auditor;
3. the re-election of George Watkins as a director of the Company who has been appointed since the last annual general meeting and, therefore, under the Articles of Association of the Company (Articles) must seek re-election;
4. the re-election of Paul Butcher as a director of the Company, who is required to seek re-election under the Articles;
5. the authorisation of the Company to allot shares pursuant to section 551 of the Companies Act 2006 (the Act); and
6. the dis-application of the pre-emption provisions set out in section 561 of the Act.
On 11 August 2011 Xtract Energy Plc announced that final approval of the Plan of Arrangement had been granted by the Ontario Superior Court of Justice.
On 24 August Xtract Energy Plc announced the completion of the sale of Extrem A.S. ("Extrem"). Payment of US$100,000 was received from Merty Energy, Petroleum Exploration, Education and Services Inc ("Merty") and individual members of the Yoldemir family in consideration for Xtract's 50% stake of Extrem, a Turkish joint stock company with a portfolio of licence interest in onshore and offshore Turkey.
On 26 August 2011 Xtract Energy Plc released the Admission Document and resumed trading as an investment company. The details of the re-admission to AIM as an operating Company contained in the Admission Document were conditional on shareholder approval of the ordinary resolution proposed at the general meeting held on 12 September 2011.
A placing of 240,000,000 new ordinary shares at 1.25p to raise approximately £3million before expenses, an agreement with YA Global Master SPV to provide potential future funding of up to £12.5 million pursuant to the Equity Line Facility and the acquisition of the outstanding share capital of Elko Energy Inc not already owned by Xtract were all approved by Xtract shareholders at a general meeting held on 12 September 2011. The enlarged share capital was re-admitted to trading on AIM on 13 September 2011.
Fund draw downs from the equity line facility are dependent on the share price and the volume of Xtract shares traded in any given period. In addition each advance cannot exceed the greater of £2 million, an amount that would result in Y A Global Master SPV holding more than 2.99% of the entire issued ordinary share capital of Xtract, or an amount equal to 300% of the average daily traded value for each of the 10 trading days prior to the Company submitting notice for an advance.
On 7 September 2011 Xtract announced Elko has subsequently been advised by Noreco that the Luna spud date is now anticipated to be in early December 2011 due to the rig being further delayed.