Paladin Resources PLC
17 January 2005
Paladin Resources plc
("Paladin", "the Company" or "the Group")
Paladin Resources plc, the oil and gas exploration company with producing
interests in the UK, Norwegian and Danish sectors of the North Sea, Australia,
Indonesia and Tunisia will announce its preliminary results for the year ending
31 December 2004 on 17 March 2005.
In advance of these results and in the light of today's separate announcements
regarding completion of the acquisition of certain producing interests in
Australia and the planned disposal of certain producing interests in the UKCS,
Paladin is pleased to provide the following guidance in respect of the Company's
performance in 2004 and its prospects for 2005.
Group production for 2004 averaged approximately 41,500 boepd in comparison to
the 42,006 boepd achieved in 2003, the benefits of an active investment
programme compensating for the natural production decline from the Company's
more mature fields. This annualised level of production was slightly lower than
anticipated at the time of the Company's interim results in September. Principal
factors were a more conservative build-up to plateau production from the
Goldeneye Field which was brought on-stream in early October, lower than
anticipated production efficiency in the final six weeks of the year on the
MonArb Fields, due to seal failures on both compressors on the Montrose
platform, and some delays to new wells coming on-stream. In addition, continuing
high oil prices had the effect of reducing the levels of reported Indonesian
entitlement production. Production figures are subject to final reconciliation,
particularly in respect of Indonesian entitlement production.
In line with expectations at the time of our interim results in September, the
Goldeneye Field has now reached stabilised plateau production rates of 70,000
boepd (Paladin net share 5,250 boepd) and gross production capacity from MonArb
is approximately 23,000 boepd (Paladin net share 13,800 boepd) with both
compressors fully operational, which is anticipated in the next few days.
Annualised Group production for 2005 is expected to be some 20 per cent higher
than in 2004 and average approximately 50,000 boepd, taking full account of the
planned disposal of the Company's interests in the Ross and Blake Fields,
announced today. In addition to the positive impact of the acquisition of the
interests in the Laminaria and Corallina Fields, offshore north-western
Australia, the Brechin satellite development adjacent to the MonArb Fields,
which is progressing to plan for first oil in mid-year, and a five well infill
drilling programme on the Montrose Field should both make a significant
contribution to the higher levels of production anticipated in 2005.
In respect of the Group's longer term growth prospects, good progress is being
made to develop the Wood discovery as a satellite to the Montrose Field, and for
the development of the Blane and Enoch discoveries on the UK-Norwegian median
line. In Norway, joint venture partners have approved a plan of development to
produce and export gas from 2007 onwards from the Njord Field.
In total, the Group plans to invest some £135 million on its existing assets in
2005, of which almost 60 per cent will be spent on its operated UKCS interests.
The Company also anticipates spending some £15 million (exclusive of activities
in which Paladin's costs are carried) on a combination of near-field satellite
exploration wells and higher risk, higher reward wildcat exploration wells, the
primary focus being on Scandinavian and UKCS activity.
Earnings for 2004 are expected to be in the region of £35 million compared to
£28.4 million in 2003.
Net debt at year-end was £107 million, inclusive of £5 million of finance lease
liabilities and after payment of a US$15 million deposit towards the purchase of
the Laminaria and Corallina interests.
Roy Franklin, Chief Executive of Paladin, commented:
"2004 has been a very active year for Paladin both operationally and in managing
the Group's portfolio of oil and gas interests; very good progress has been made
on both fronts. Group production in 2005 should rise to some 50,000 boepd, while
the substantial capital investment programme planned for 2005 and 2006 is
specifically targeting further significant increases in production from our
existing asset base. The 2005 exploration programme should see Paladin
participate in up to eight wells, and the Company remains in a strong financial
position to make further acquisitions as and when opportunities arise which we
consider attractive and material."
The information provided above in respect of the Company's performance in 2004
is indicative, subject to final review, and has not been audited. This
announcement also contains forward-looking statements that are subject to risk
factors associated with the oil and gas business.
It is believed that the expectations reflected in these statements are
reasonable, but they may be affected by a number of factors which could cause
actual results or trends to differ materially. These include but are not limited
to: price fluctuations, actual demand, currency fluctuations, drilling and
production results, reserve estimates, loss of market, industry competition,
environmental risks, physical risks, legislative, fiscal and regulatory
developments, economic and financial market conditions in various countries and
regions, political risks, project delay or advancement, approvals and cost
17 January 2005
Paladin Resources plc Tel: 020 7024 4500
Roy A. Franklin, Chief Executive
Cuth McDowell, Finance Director
College Hill Tel: 020 7457 2020
This information is provided by RNS
The company news service from the London Stock Exchange