30 Mar 2010 07:00
Altona Energy Plc / Index: AIM / Epic: ANR / Sector: Exploration & Production
30 March 2010
Altona Energy Plc ('Altona' or 'the Company')
Interim Results
Altona Energy Plc, the AIM-listed Australia-based energy company, announces its results for the six month period ended 31 December 2009.
Highlights:
·; Agreed terms for the milestone joint venture agreement with CNOOC-NEI, a subsidiary of one of China's major oil companies, to advance estimated 7.8 billion tonne coal resource (non-JORC) towards commercialisation
·; Increased support from institutional investors including Invesco Perpetual ('Invesco') which raised its stake to over 18% since August 2009
·; Foundation Member of the Global Carbon Capture and Storage Institute
Post Period Highlights:
·; Appointment of Peter Fagiano, of Jacobs Engineering ('Jacobs'), as Senior Executive in charge of Project Technology
·; Institutional placing of 33,333,334 new Ordinary Shares at 9 pence each to raise gross proceeds of £3.0 million. Separate announcement has been released today
Outlook:
·; Currently working with CNOOC-NEI to complete legal structures and ensure Australian Government approval for the JV
·; Focussed on advancing the Arckaringa Bankable Feasibility Study ('BFS')
o CNOOC-NEI providing all financing for the completion of the BFS and will act as operator to carry out the staged evaluation work
o Anticipate imminent appointment of world-renowned Study Engineer firm
o Significant de-risking and value enhancing work scheduled for 2010
Chairman's Statement
This has been a transformational period for your Company, when we have continued to build momentum and crystallise value on our hugely exciting energy project. The major achievement was undoubtedly agreeing the terms of a joint venture agreement ('JV'), in November 2009, with CNOOC New Energy Investment Ltd ('CNOOC-NEI'), a subsidiary of one of China's largest national oil companies. Your Board believes this is instrumental towards commercialising our internationally significant energy bank in South Australia and realising the project's huge potential. The JV secures funding for the completion of the BFS for the Arckaringa Project (the 'Project'), as well as significantly reducing financial and operational risk. Importantly, the JV with CNOOC-NEI will assess the exciting multiple project potential of the Arckaringa coal deposit, including coal development, CTL, synthetic natural gas, power co-generation and other potential clean energy projects.
Altona's asset, an estimated 7.8 billion tonne coal deposit in the Arckaringa Basin of South Australia, of which 1.287 billion tonnes is a JORC-compliant resource, is considered by the Board to be one of the world's largest untapped energy banks. The remainder of the 7.8bt deposit has previously been reported as a "resource" under mineral reporting standards in existence before the advent of the present JORC Code and at a time when energy prices were generally considered lower than today's. Altona considers it currently unnecessary to expand the JORC Resource by re-drilling the non-JORC deposit. To put this into context, as per Jacobs Engineering's study, assuming a 50% conversion to CTL fuels and 50% to synthetic gas ('Syngas'), Arckaringa total coal resources (both JORC and non-JORC) would represent 28% and 29% of current North Sea proven reserves of oil and gas, respectively.
Further to the extensive tender process undertaken and the JV with CNOOC-NEI, we anticipate announcing the appointment of one of the world's leading project engineering firms as the BFS Study Engineer, which will oversee the BFS work programme. A successful BFS would significantly de-risk the Project and underpin the unlocking of considerable value.
Similarly, we were very pleased to recently announce the appointment of Peter Fagiano as Senior Executive in charge of Project Technology. Peter has worked closely with Altona on the pre-feasibility study in his role with Jacobs so we were delighted by the vote of confidence in his decision to join Altona in a part-time executive role. While advising Altona in his new role, Peter will retain his current role of Director of Operations at Jacobs Engineering UK Limited, meaning he will constantly be able to advise our team on the latest techniques applicable to our energy bank.
The rationale behind the Arckaringa Project is simple; the quality of our coal is suitable for conversion to Syngas, using existing tried and tested commercial technologies. The products from Arckaringa will be highly marketable given growing worldwide energy demand - in particular they would help to fill the projected energy shortfall faced by South Australia, which already has to import all its diesel fuel needs and is forecast to require an additional 1,000MW of base load power over the next 10 years. Additionally, the JV with CNOOC-NEI would also enable the targeting of CTL exports to China and other Asian markets.
CTL is an exciting prospect for our internationally significant deposit base. Sasol Ltd has been using the technology commercially for decades in South Africa, a country where currently approximately 30% of gasoline and diesel fuel needs are met through CTL plants. Additionally, Rentech Inc. recently announced a Memorandum of Understanding ('MOU') with thirteen air carriers to supply aviation fuel; aviation fuel is ideally suited to production from CTL technologies. Demand for such fuels means that aviation fuel production is one of several high margin products being evaluated for the Arckaringa Project.
In addition to CNOOC-NEI validating the Project's potential, we have also been generating interest within the investment community, resulting in a strengthened shareholder base. Indeed, in addition to taking part in the placing announced this morning, Invesco invested £0.5 million in August 2009 and a further £0.3 million in January 2010.
As we have separately announced today, the Company has conditionally placed 33,333,334 new Ordinary Shares with certain existing and new institutional investors at 9 pence each to raise gross proceeds of £3.0 million (the 'Placing'). Evolution, our recently appointed nominated advisor and broker, acted as Sole Bookrunner to the Placing. The net proceeds of the Placing will fund the Company for over 18 months, with CNOOC-NEI providing all funding for the completion of the BFS for the Arckaringa Project. The Placing is conditional upon admission of the new Ordinary Shares, which is expected to occur on 31 March 2010, and represents 8.1 per cent of the enlarged issued share capital of the Company.
During the period, we were pleased for Altona to be accepted as a Foundation Member of the Global Carbon Capture and Storage Institute, and the furthering of our long-term relationships with the South Australian Government, particularly the Department of Primary Industries and Resources of South Australia. In February 2010, the management team visited key government officials and a number of key institutions throughout Australia as part of our regular process to keep and stakeholders informed and up-to-date with our progress.
Altona has been working very closely with CNOOC-NEI on the formal application to Australia's Foreign Investment Review Board ('FIRB') for the final stage of approval for the JV, and we look forward to its imminent submission. CNOOC and BG Group only this month received FIRB approval for a US$40 billion, 20 year agreement to supply China with liquefied natural gas, with Martin Ferguson, Australia's Energy Minister, speaking of a commitment to strengthen Australia's 'healthy and mutually beneficial' relationship with China. It is interesting to note from the latest FIRB report (2007-08), that China was the sixth largest investor in the Australian economy during this period with over 1,700 applications approved by FIRB, resulting in China investing over A$5.3 billion in Australia's resources sector alone.
The year ahead will be another busy and exciting period for Altona. The submission to FIRB is expected to be made by the beginning of the second quarter 2010 and we expect a decision during the second quarter and within the normal review period, given the thorough preparation for the FIRB submission. The first of the JV management committee meetings has already been held and work has commenced on finalising the scope and budget for the first phase of the BFS. This very important first phase will cover key value enhancing activities including mine design and planning, groundwater engineering and environmental studies, all of which will underpin the follow-up engineering of the coal conversion plant, whilst significantly de-risking our business further. We also anticipate that the JV legal structures should be finalised during April to enable the JV to be signed by CNOOC-NEI's local Australian entity.
The financial loss of the Group for the six months ended 31 December 2009 of £0.531 million (2008: £0.718 million) was in line with expectations and includes the benefit during the period of a £149,000 tax credit in respect of research and development costs available to the Group.
I would like to thank all those involved in bringing the Arckaringa Project to this very exciting and important stage, as well our new and existing shareholders for their support, and I look forward to updating you all on our progress throughout the year.
Chris Lambert
Chairman
**ENDS**
For further information visit www.altonaenergy.com or please contact:
| Christopher Lambert | Altona Chairman | Tel: +44 (0) 20 7024 8391 |
| Christopher Schrape | Altona Managing Director | Tel: +44 (0) 20 7024 8391 |
| Simon Edwards | Evolution Securities Ltd | Tel: +44 (0) 20 7071 4300 |
| Tim Redfern | Evolution Securities Ltd | Tel: +44 (0) 20 7071 4300 |
| Paul Youens | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
| Hugo de Salis | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
Notes
Altona Energy Plc is an AIM listed Australian based energy company. Its asset is an estimated 7.8 billion tonne coal resource (non-JORC) in the Arckaringa Basin of South Australia (JORC-compliant: 1.287 billion tonnes). This is considered by the Board to be one of the world's largest untapped energy banks. Per Jacobs Engineering's study for the Company, assuming a 50% conversion of CTL fuels and 50% to synthetic gas ('Syngas'), Arckaringa total coal resources (both JORC and non-JORC) would represent respectively 28% and 29% of current North Sea remaining proven reserves of 10,900mb of oil and 114,800 bcf of natural gas.
Altona has already accomplished a number of key phases in its development:
·; The Company has agreed the terms of a joint venture agreement with CNOOC-NEI, a subsidiary of Chinese oil major China National Offshore Oil Corporation, to accelerate the Arckaringa Project towards commercialisation.
·; Under the terms of the agreement, CNOOC-NEI will fund the bankable feasibility study ('BFS') for a coal mine and an integrated value-added project.
·; The current base case for the BFS is a 10mb per year CTL plant and 560MW co-generation power facility.
·; CNOOC-NEI will also act as the operator and take responsibility for assessing the full potential of the coal resource, in return for a 51% interest in the exploration licences.
·; It is envisaged that numerous new additional projects may also be opened up to create a multi-project, multi-national business.
CTL
The quality of the Company's coal is suitable for conversion to synthetic gas ('Syngas'), using existing commercial CTL technologies. The process involves two major stages;
1. gasification to produce Syngas rich in hydrogen and carbon
2. a liquefication stage where the Syngas is reacted over a catalyst to produce high quality, ultraclean synthetic fuels and chemical feedstocks.
CTL is a prime example of clean coal technology - the associated combined cycle units produce negligible sulphur oxides, significantly less nitrogen oxides and 10-20% less CO2 per unit of power generated than a conventional coal fired plant, whilst carbon capture and storage offers the potential to reduce the overall greenhouse gas emissions from CTL to below the 'well to wheel' level of fuels derived from crude oil. The technology is best demonstrated in South Africa, where currently 30% of the country's gasoline and diesel fuel needs are met through CTL plants.
Consolidated Statement of Comprehensive Income
For the half year ended 31st December 2009
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| Notes | Unaudited Half-year ended 31 Dec 2009 | Unaudited Half-year ended 31 Dec 2008 | Audited Year ended
30 June 2009 |
|
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| £'000 | £'000 | £'000 |
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|
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| Share based payments expense |
| (19) | (224) | (292) |
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| Other administrative expenses |
| (666) | (543) | (1,037) |
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| Total administrative expenses |
| (685) | (767) | (1,329) |
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| Finance income |
| 5 | 49 | 57 |
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| Loss before taxation |
| (680) | (718) | (1,272) |
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| Income tax benefit | 3 | 149 | - | 152 |
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|
|
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| Loss for the financial period |
| (531) | (718) | (1,120) |
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| Other comprehensive income |
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| Exchange gains / (loss) arising on translation of foreign operations |
| 1,019 | (1) | 135 |
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| Total comprehensive income attributable to the equity holders of the parent |
| 488 | (719) | (985) |
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| Loss per share expressed in pence |
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| - Basic and diluted | 4 | (0.14p) | (0.20p) | (0.31p) |
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Consolidated Balance Sheet
At 31st December 2009
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| Notes | Unaudited 31 Dec 2009 £'000 | Unaudited 31 Dec 2008 £'000 | Audited 30 June 2009 £'000 |
| ASSETS |
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| Non-current assets |
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| Intangible assets | 5 | 7,769 | 6,200 | 6,609 |
| Plant and equipment |
| 20 | 39 | 30 |
| Other receivables |
| 39 | 39 | 39 |
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|
| 7,828 | 6,278 | 6,678 |
| Current assets |
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| Cash and cash equivalents |
| 165 | 1,207 | 305 |
| Trade and other receivables | 6 | 196 | 158 | 217 |
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|
| 361 | 1,365 | 522 |
| Total assets |
| 8,189 | 7,643 | 7,200 |
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| LIABILITIES |
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| Current liabilities |
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| Trade and other payables |
| 226 | 455 | 210 |
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| NET ASSETS |
| 7,963 | 7,188 | 6,990 |
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| Capital and reserve attributable to the equity holders of the Parent |
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| Issued capital | 7 | 370 | 358 | 358 |
| Share premium |
| 7,004 | 6,550 | 6,550 |
| Merger reserve |
| 2,001 | 2,001 | 2,001 |
| Share-based payments reserve |
| 712 | 625 | 693 |
| Foreign exchange reserve |
| 1,662 | 507 | 643 |
| Retained losses |
| (3,786) | (2,853) | (3,255) |
| TOTAL EQUITY |
| 7,963 | 7,188 | 6,990 |
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Consolidated Cash Flow Statement
For the half year ended 31st December 2009
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| Unaudited Half-year ended 31 Dec 2009 | Unaudited Half-year ended 31 Dec 2008 | Audited Year ended 30 June 2009 |
|
| £'000 | £'000 | £'000 |
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| Operating activities |
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| Loss for period | (531) | (718) | (1,120) |
| Finance income | (5) | (49) | (57) |
| Depreciation | 10 | 10 | 19 |
| Share options expensed | 19 | 224 | 292 |
| (Increase) / decrease in receivables | 18 | (65) | 28 |
| Decrease in payables | 94 | 366 | 116 |
| Income tax benefit | (149) | - | (152) |
| Cash used in operations | (544) | (232) | (874) |
| Income tax benefit received | 152 | - | - |
| Net cash outflow used in operating activities | (392) | (232) | (874) |
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| Investing activities |
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| Payments to acquire intangible fixed assets | (219) | (1,330) | (1,598) |
| Interest received | 5 | 49 | 57 |
| Net cash outflow from investing activities | (214) | (1,281) | (1,541) |
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| Financing activities |
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| Proceeds from issue of shares | 501 | - | - |
| Issue costs paid | (35) | - | - |
| Net cash inflow from financing | 466 | - | - |
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| Decrease in cash in period | (140) | (1,513) | (2,415) |
| Cash at bank and cash equivalents at beginning of period | 305 | 2,720 | 2,720 |
| Cash at bank and cash equivalents at end of period | 165 | 1,207 | 305 |
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Consolidated Statement of Changes in Equity
For the half year ended 31st December 2009
|
| Issued capital | Share premium reserve | Merger reserve | Share based payment reserve | Foreign exchange reserve | Retained earnings | Total shareholders equity |
|
| £'000 | £'000 | £'000 | £'000 |
| £'000 | £'000 |
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|
| As at 1 July 2008 | 358 | 6,550 | 2,001 | 401 | 508 | (2,135) | 7,683 |
| Total comprehensive income for the period | - | - | - | - | (1) | (718) | (719) |
| Share based payments | - | - | - | 224 | - | - | 224 |
| Balance at 31 December 2008 | 358 | 6,550 | 2,001 | 625 | 507 | (2,853) | 7,188 |
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| Total comprehensive income for the period | - | - | - | - | 136 | (402) | (266) |
| Share based payments | - | - | - | 68 | - | - | 68 |
| Balance at 30 June 2009 | 358 | 6,550 | 2,001 | 693 | 643 | (3,255) | 6,990 |
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| Total comprehensive income for the period | - | - | - | - | 1,019 | (531) | 488 |
| Share capital issue | 12 | 489 | - | - | - | - | 501 |
| Cost of share capital issue | - | (35) | - | - | - | - | (35) |
| Share based payments | - | - | - | 19 | - | - | 19 |
| Balance at 31 December 2009 | 370 | 7,004 | 2,001 | 712 | 1,662 | (3,786) | 7,963 |
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Notes to the Interim Report
For the half year ending 31st December 2009
1. GENERAL INFORMATION
Altona Energy Plc (the "Company") is a company domiciled in England. The condensed consolidated interim financial statements of the Company for the six months ended 31 December 2009 comprise the result of the Company and its subsidiaries (together referred to as the "Group").
The condensed interim financial information for the period 1 July 2009 to 31 December 2009 is unaudited. In the opinion of the Directors the condensed interim financial information for the period presents fairly the financial position, and results from operations and cash flows for the period in conformity with the generally accepted accounting principles consistently applied. The condensed interim financial information incorporates unaudited comparative figures for the interim period 1 July 2008 to 31 December 2008 and extracts from the audited financial statements for the year to 30 June 2009.
The financial information contained in this interim report does not constitute statutory accounts as defined by section 435 of the Companies Act 2006.
The comparatives for the full year ended 30 June 2009 are not the Company's full statutory accounts for that year. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) - (3) of the Companies Act 2006.
2. ACCOUNTING POLICIES
The condensed interim financial information has been prepared using International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. The condensed interim financial information has been prepared using the accounting policies which will be applied in the Group's statutory financial information for the year ended 30 June 2010.
Basis of preparation
The accounts have been prepared on a going concern basis. As is common with many junior mining companies, the Company raises money for exploration and capital projects as and when required. There can be no assurance that the Group's projects will be fully developed in accordance with current plans or completed on time or to budget. Future work on the development of these projects, the levels of production and financial returns arising there from may be adversely affected by factors outside the control of the Group.
The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements, except as described below.
Changes in accounting policies
In the current financial year, the Group has adopted IAS 1, "Presentation of Financial Statements" (Revised) and IFRS 8, "Operating Segments.
IAS 1 Presentation of Financial Statements (Revised) includes the requirement to present a Statement of Changes in Equity as a primary statement and introduces the possibility of either a single Statement of Comprehensive Income (combining the Income Statement and a Statement of Comprehensive Income) or to retain the Income Statement with a supplementary Statement of Comprehensive Income. The first option has been adopted by Altona Energy Plc. As this standard is concerned with presentation only it does not have any impact on the results or net assets of the Group.
IFRS 8, Operating Segments requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker ("CODM"). By contrast IAS 14, "Segmental Reporting" required business and geographical segments to be identified on a risks and rewards approach. The business segmental reporting bases used by the Company in previous years are those which are reported to the CODM, so the changes to the segmental reporting for 2009 are in respect of the additional disclosure only. Comparatives will be restated.
3. TAXATION
The Group has recognised a £149,000 tax credit (31/12/08: £Nil and 30/06/09:£152,000) in respect of the concession for research and development available to the Group. No current taxation has been provided due to losses in the period.
4. LOSS PER SHARE
The basic loss per share is derived by dividing the loss for the period attributable to ordinary shareholders by the weighted average number of shares in issue.
|
| Unaudited 31 Dec 2009 £'000 | Unaudited 31 Dec 2008 £'000 | Audited 30 June 2009 £'000 |
| Loss for the period | (531) | (718) | (1,120) |
| Weighted average number of shares - expressed in million | 368.0 | 358.2 | 358.2 |
| Basic loss per share - expressed in pence | (0.14p) | (0.20p) | (0.31p) |
As the inclusion of the potential ordinary shares would result in a decrease in the loss per share they are considered not to be dilutive and, as such, the diluted loss per share calculation is the same as the basic loss per share.
5. INTANGIBLE ASSET
The Intangible Asset relates to Project of Company's 100% subsidiary Arckaringa Energy Pty Limited.
|
| Unaudited 31 Dec 2009 £'000 | Unaudited 31 Dec 2008 £'000 | Audited 30 June 2009 £'000 |
| Exploration and evaluation |
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| Cost |
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| At beginning of period | 6,609 | 4,987 | 4,987 |
| Additions | 163 | 1,162 | 1,568 |
| Currency translation adjustment | 997 | 51 | 54 |
| At end of period | 7,769 | 6,200 | 6,609 |
On 18 November 2009, the Company announced it had signed a binding agreement for the Joint Venture to develop the Arckaringa Project. Under the terms of the Unincorporated Evaluation Joint Venture ('UEJV'), a subsidiary of CNOOC-New Energy Investment Ltd ('CNOOC-NEI-Sub') will fund the bankable feasibility study ('BFS') for the Arckaringa Project and will act as the operator, not only to carry out the staged evaluation work under the BFS, but also to take responsibility for assessing the full potential of the coal resource and bringing projects to development, in return for a 51% interest in Arckaringa Energy's exploration licences. If the parties decide to adopt and implement the Mining Development Project or a Nominated Project, they will then negotiate and enter into a development agreement in relation to each project (a 'Development Agreement'), under which CNOOC-NEI-Sub's interest in the relevant project can increase to 70%.
The Agreement is conditional upon the receipt by the parties of the relevant third party consents, including from the Chinese government and the Australian Foreign Investment Review Board. These consents are to be obtained within 180 days of signing the Agreement; however this may be extended by mutual agreement of the parties.
6. TRADE AND OTHER RECEIVABLES
|
| Unaudited 31 Dec 2009 £'000 | Unaudited 31 Dec 2008 £'000 | Audited 30 June 2009 £'000 |
| Current trade and other receivables |
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|
|
| Other receivables | 20 | 112 | 40 |
| Tax credit receivable | 156 | - | 152 |
| Prepayments and accrued income | 20 | 46 | 25 |
|
| 196 | 158 | 217 |
7. CALLED UP SHARE CAPITAL
| Authorised
| Unaudited 31 Dec 2009 £'000 | Unaudited 31 Dec 2008 £'000 | Audited 30 June 2009 £'000 |
| 1,000,000,000 Ordinary shares of 0.1p each | 1,000 | 1,000 | 1,000 |
Allotted, called up and fully paid
| 370,468,894 (31 December 2008 and 30 June 2009: 358,165,784)Ordinary shares of 0.1p each | 370 | 358 | 358 |
There were no share issues in the period ended 31 December 2008 and 30 June 2009. During the period the Company issued the following Ordinary 0.1 pence fully paid shares for cash:
| Date | Issue Price | Number of Shares | Nominal Value £'000 |
| 1 July 2009 | Opening balance | 358,165,784 | 358 |
| 7 August 2009 | Placing at 4.10p per share (gross) | 12,195,122 | 12 |
| 2 October 2009 | Exercise of options at 1.00p per share (gross) | 107,988 | - |
| 31 December 2009 | Closing balance | 370,468,894 | 370 |
Share options and warrants
| The following equity instruments have been issued by the Company and have not been exercised at 31 December 2009:
|
| ||||
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|
| Number of ordinary shares | Exercise price |
Expires | |
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| IPO options | 1,642,012 | 1.00p | 10/03/2010 | |
|
| Warrant instrument | 3,000,000 | 8.00p | 02/08/2011 | |
|
| Warrant instrument | 3,000,000 | 12.00p | 02/08/2011 | |
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| Warrant instrument | 3,000,000 | 16.00p | 02/08/2011 | |
|
| Director options | 6,000,000 | 7.00p | 12/10/2011 | |
|
| Director options | 5,000,000 | 10.00p | 12/10/2011 | |
|
| Director options | 3,000,000 | 14.00p | 12/10/2011 | |
|
| Broker options | 1,500,000 | 4.75p | 23/04/2012 | |
|
| Broker options | 1,500,000 | 9.50p | 23/04/2012 | |
|
| Director & employee options | 12,375,000 | 5.00p | 19/08/2013 | |
|
| Director & employee options | 12,375,000 | 7.00p | 19/08/2013 | |
8. SHARE BASED PAYMENTS
The assessed fair value at the grant date has been determined using the Black-Scholes Model that takes into account the exercise price, the term of the option, the share price at grant date, the expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
Directors and Employee Options
During the previous period, the Company granted options to Directors and employees as tabled below. Under IFRS 2 'Share Based Payments', the Company determines the fair value of options issued to Directors and employees as remuneration and recognises the amount as an expense in the income statement with a corresponding increase in equity.
| Date Granted | Number | Exercise Price | Expiry Date | Fair Value per Option | Fair Value £'000 |
| 20/08/2008 | 12,375,000 | 5p | 19/08/2013 | 1.4p | 174 |
| 20/08/2008 | 12,375,000 | 7p | 19/08/2013 | 1.1p | 137 |
|
| 24,750,000 |
|
|
| 311 |
The fair value of the options granted to Directors and employees during the previous period was £311,000. The key inputs applied to the Black-Scholes Model included: the closing share price on 20 August 2008 of 3.15p; risk free interest rate of 4.49%; and expected volatility of 0.60.
The 5p options contained no vesting period and were expensed in the previous period. The 7p options contained a 12 month vesting period over which the option expense is recognised. During the period, the remaining £19,000 has been recognised.
9. CONTINGENT LIABILITIES
In the period ended 30 June 2006, the Group acquired the subsidiary Arckaringa Energy Pty Ltd. At that time Arckaringa Energy Pty Ltd was the holder of three exploration licences in South Australia. The Group obtained advice that this acquisition could be assessed as not subject to the land rich stamp duty provisions relating to South Australian property. Revenue SA has been reviewing this acquisition and at the date of these accounts, the Group has not yet received an assessment. The advice provided to the Group indicates that should stamp duty ultimately be payable it may amount to AUD$252,000 (GBP £141,000).
In the event that an additional stamp duty payment is required the amount paid would represent an increase in the amount recognised as capitalised exploration and evaluation expenditure.
The Group has not recognised a liability in connection to additional stamp duty as the Directors believe that no further stamp duty is payable in connection to this matter, based on professional advice received at the time of acquisition and subsequently, and in the absence of further details from Revenue SA.
10. SUBSEQUENT EVENTS
Subsequent to 31 December 2009, the Company issued 5,971,544 Ordinary Shares in January 2010, with 4,285,715 Ordinary Shares via a placement raising £300,000 before costs and 1,685,829 shares from options being exercised, raising approximately £73,000. The Company issued 1,456,183 Ordinary Shares in March 2010 from options being exercised, raising approximately £15,000.
On 30 March 2010, the Company also announced that it had conditionally placed 33,333,334 new Ordinary Shares with certain existing and new institutional investors at 9 pence each to raise gross proceeds of £3.0 million. The placing of the 33,333,334 new Ordinary Shares are conditional only upon admission to trading on AIM, which is expected to occur on 31 March 2010.
On the 5 January 2010, the Company announced the cancellation of 14 million options issued to directors of the Company in October 2006, and the issue of 14 million replacement options to these directors. The options are for a term of four years from the date of issue, with an exercise price of 7p, with half vesting immediately, and half vesting in twelve months. The financial impact has not been recorded in these accounts.