Ascent Resources Regulatory News (AST)

24 Mar 2006 07:01

Ascent Resources PLC24 March 2006 Ascent Resources plc / Epic: AST / Index: AIM / Sector: Oil and Gas 24 March 2006 Ascent Resources plc ('Ascent' or 'the Company') Interim Results Ascent Resources plc, the AIM listed oil and gas exploration and productioncompany, announces its results for the six month period ended 31 December 2005. Overview • Extensive portfolio of oil and gas exploration and production assets at various stages of development in Spain, Italy, Switzerland, Hungary and applications gazetted in the Netherlands, as well as a minor interest in Gabon. • Experienced team of oil and gas professionals supported by institutional financing. • Structured development plan includes increasing production at Spanish oil field and the drilling of up to six exploration wells. • Continue to look for opportunities in various European countries and currently evaluating a number of new proposals. • Healthy financial position with £3.3m cash in the bank and over €1m of drilling inventory Managing Director Jeremy Eng said: "We have worked hard assembling theportfolio which includes both production and exploration properties. We arefocussing primarily on gas with up to six exploration wells planned for 2006 andimportantly our overheads are being covered by the Spanish oil production. Webelieve that by working closely to our defined development programme and withour local partners, the team is well positioned to create value and define thetrue value of Ascent's portfolio." Chairman's statement It gives me pleasure to provide my first interim report since assuming my roleas Chairman. Over the period we have made good progress, having completed anumber of acquisitions, strengthened the board and operation structure, raisedfinance and continued to develop and advance our European focussed oil and gasproduction and exploration portfolio. We now have an extensive portfolio of assets in Spain, Italy, Switzerland,Hungary and applications gazetted in the Netherlands, as well as a minorinterest in Gabon. The portfolio is managed by an experienced team of oil andgas professionals and supported by institutional financing. The team has workedhard to build the portfolio, which I believe with the work programme planned hasgood potential to reward shareholders in the short term and provide greatpotential in the long term. In order to achieve this we are now consolidating our projects through astructured development plan. This includes increasing production at our Spanishoil field and the drilling of up to six exploration wells, with the intention ofcapitalising particularly on the gas potential of our properties. On the production side, we have increased our beneficial interest in theproducing Ayoluengo oil field in the Sedano Basin in Spain to 88.75%. We havebegun engineering studies for an investment programme designed to increase theproduction rate of the field, which currently averages 115 barrels of oil perday (gross). We have also made progress in exploration. In Hungary we have completed the270km 2D seismic survey in the Nyirseg Exploration Permits, which importantlywas completed on schedule and within budget. We are also in the process offinalising four drilling locations and are about to submit the applications forthe relevant permits. Additionally we are making progress with MOL, theHungarian major, regarding the gas field redevelopment project. We haveproposed a three well horizontal re-completion programme and are awaiting anofficial response. It is possible that these wells will be drilled this year. We have expanded our interests in Italy following the acquisition of a 40%interest in the Fiume Arrone exploration concession, where a gas explorationwell is scheduled to be drilled under our management. In the Po Valley, thereprocessing of the seismic data purchased from ENI has given encouragingresults. We have commenced the environmental permitting for two well locationsand plan to start two more shortly. The permitting process will allow us toinclude these wells in the 2007 drilling schedule. In the Latina Valley, southeast of Rome, a well is also scheduled for this year. We have expanded our exploration portfolio in Spain with the acquisition of a50% interest in the Huermeces, Valderredible and Basconcillos-H explorationpermits covering a total of 556 square kilometres. Two exploration/appraisalwells Tozo 1 and Hontomin 4 in the Basconcillos and Huermeces permits are in the2006 drilling schedule. Our applications in Holland, which were lodged last year, were published in theEU Gazette in December 2005 and the completion period closes imminently. Finally and by no means least, in Switzerland we are busy collecting data, andloading seismic data for reprocessing in the permits, each of which contain adiscovery. With known gas in the concession area, we are now quantifying thescale of the structures in order to progress them and hope to be ready topropose one or two drilling locations for the 2007 schedule. We continue to look for opportunities in various European countries to expandour portfolio. In line with this we are evaluating a number of new proposalsthat have the potential to fit our development criteria. To help fund the expansion and the drilling operations, we raised in excess of£2 million through the exercise of existing warrants. With the Company'soverhead covered from the production in Spain and no debt, I believe ourfinancial position is healthy. Organisationally we have made a number of changes which the Board believes willhelp the development of the Company. In addition to Patrick Heren and myselfjoining the Board, Jonathan Legg, previously a non executive director, hasassumed an executive role. Additionally, we have established a ExecutiveCommittee ("Excom") comprising of Jeremy Eng, Malcolm Groom and Jonathan Legg. In summary, we plan to drill up to six wells in 2006 and a similar number in2007. We have a diverse portfolio of oil and gas assets across Europe at variousstages of development, which I believe has a strong chance of yieldingdiscoveries that will transform your Company. John Kenny Chairman CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 (Unaudited) (Audited) six months ended Year ended 31 December 2005 30 June 2005 Note £ £Group turnover - - Cost of sales - - Gross profit - - Administrative expenses including (601,529) (418,040)goodwillGroup operating loss (601,529) (418,040) Interest receivable 47,026 15,594Interest payable (6,762) - Loss on ordinary activities before taxation (561,265) (402,446) Taxation (198) - Loss on ordinary activities (561,463) (402,446)after taxation Minority interest 265 1,314 Loss for the period (561,198) (401,132) Dividends - - Retained loss for the period (561,198) (401,132) Loss per shareBasic 2 (0.25)p (0.31p) STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 (Unaudited) (Audited) Six months ended Year ended 31 December 2005 30 June 2005 Retained loss for the period (561,198) (401,132) Exchange differences 41,809 - _______ _______Total gains and lossesRecognised for the period (519,389) (401,132) ======= ======= CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2005 (Unaudited) (Audited) 31 December 2005 30 June 2005 Note £ £Fixed assets Intangible assets 3 2,090,644 164,973Tangible assets 16,303 - 2,106,947 164,973Current assets Current asset investments 4 192,794 987,629Debtors 5 1,051,941 57,418Cash at bank and in hand 3,306,401 3,673,353 4,551,136 4,718,400 Creditors: amounts falling due within one year (55,544) (54,984) Net current assets 4,495,592 4,663,416 Total assets less current Liabilities 6,602,539 4,828,389 Minority Interest (104) (369) Net assets 6,602,435 4,828,020 Capital and reserves Called up share capital 6 253,820 208,518Share premium account 7 7,269,136 5,020,634Profit and loss account 7 (920,521) (401,132) Shareholders' funds 8 6,602,435 4,828,020 CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 (Unaudited) (Audited) six months ended year ended 31 December 2005 30 June 2005 Notes £ £ Net cash outflow from operating activities 9 (976,610) (410,447) Returns on investments and servicing offinanceInvestment income 47,026 15,594Interest paid (6,762) - (936,346) (394,853) Taxation (198) - Acquisitions andDisposals usedCash acquired with subsidiary undertakings 11 77,533 -Acquisition of a subsidiary undertaking (1,508,509) -Payments to acquire tangible assets (18,068) -Net funds for investing in exploration 3 (955,652) (70,000)Receipt from sale of current assetinvestments 1,392,811 - Acquisition of current asset investments (585,144) (387,629) Net cash received from a minority - 1,683shareholder of subsidiary undertaking Net cash outflow from acquisitions (1,597,029) (455,946) Net cash outflow before financing (2,533,573) (850,799) Financing Proceeds from issue of shares 2,166,621 4,838,410Issue costs - (314,258) Cash inflow from financing 2,166,621 4,524,152 (Decrease)/increase in cash 10 (366,952) 3,673,353 NOTES TO THE FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 1. Basis of preparation The financial information is prepared in accordance with the historical costconvention and in accordance with applicable accounting standards and theStatement of Recommended Practice "Accounting for Oil and Gas Exploration,Development, Production and Decommissioning Activities". The financial information has been prepared on the basis of a going concern. The results for the six months ended 31 December 2005 are unaudited and do notconstitute statutory accounts as defined in section 240 of the Companies Act1985. They have been prepared using accounting bases and policies consistentwith those used in the preparation of the financial statements of AscentResources Plc for the year ended 30 June 2005. The comparative figures for the year ended 30 June 2005 are extracted from thestatutory financial statements which have been filed with the Registrar ofCompanies and which contain an unqualified audit report. 2. Loss per ordinary share The basic loss per ordinary share has been calculated using the loss for thefinancial period of £561,198 (30 June 2005 - loss of £401,132) and the averagenumber of ordinary shares in issue of 222,144,713 (year ended 30 June 2004 -127,879,476). No diluted loss per ordinary share has been disclosed because the conversion ofshare warrants would decrease the net loss per share. 3. Intangible assets The movements during the period were as follows: Exploration and Positive Goodwill Negative Goodwill Total appraisal expenditure £ £ £ £CostAs at 1 July 2005 70,000 105,526 - 175,526Additions 955,652 59,228 (853,478) 161,402Acquired with a subsidiary 1,729,832 - - 1,729,832undertaking ________ ________ ________ ________ At 31 December 2005 2,755,484 164,754 (853,478) 2,066,760 ________ ________ ________ ________AmortisationAs at 1 July 2005 - (10,553) - (10,553)(Charge)/credit for the period - (8,237) 42,674 34,437 ________ ________ ________ ________ At 31 December 2005 - (18,790) 42,674 23,884 ________ ________ ________ ________Net book valueAt 31 December 2005 2,755,484 145,964 (810,804) 2,090,644 ======= ======= ======= ======= At 30 June 2005 70,000 94,973 - 164,973 ======= ======= ======= ======= The negative goodwill of £853,478 arose on the acquisition of the Company'ssubsidiary undertaking Ascent Resources Italiana S.r.l (note 11). Goodwill isbeing amortised over the directors' estimate of its useful economic life of 10years. 4. Current asset investments 31-Dec 30-Jun 2005 2005 £ £ Investment in Afren Plc 192,794 -Investment in Gabon Investments (Iris Main) Pty Ltd - 507,882Investment in Gabon Investments (Themis Main) Ltd - 479,747 _______ _______ 192,794 987,629 ====== ====== The Company sold its investment in Gabon Investments (Iris Main) Pty Limited andGabon Investments (Themis Marin) Limited for £1,392,811. The Company alsoreceived 404,350 shares in Afren Plc, a company listed on the AIM market. Inaddition, the Company is granted a 1.75% net profits interest in each of the twoproduction sharing contracts in the companies sold, which will be paid on aquarterly basis. 5. Debtors 31-Dec 30-Jun 2005 2005 £ £ Deposits 181,870 55,295Other debtors 870,071 2,123 _______ _______ 1,051,941 57,418 ====== ====== The deposits represent amounts paid to third parties in respect of theacquisitions of Teredo Oils Limited and Northern Petroleum Exploration Limitedto be completed at a future date. These acquisitions are subject to certainconditions which were outstanding as at 31 December 2005. 6. Share capital 31-Dec-05 30-Jun-05 £ £Authorised10,000,000,000 ordinary shares of 0.1p each 10,000,000 10,000,000 ======= ========Allotted, called up and fully paidAs at 1 July 2005 208,518 -Shares issued 45,302 208,518 ________ ________ As at 31 December 2005 253,820 208,518 ======= ======== The movements in the share capital and the warrants are summarised below: Number of Number of warrants shares As at 1 July 2005 208,518,168 61,692,418Shares issued in lieu of services provided 424,111 -Shares issued on acquisition of PEOS AG (note11) 1,175,100 -Shares issued on proposed acquisition ofNorthern Petroleum Exploration Ltd* 370,370 -Warrants issued - 21,283,104Warrants exercised for cash 43,332,418 (43,332,418) __________ __________ At 31 December 2005 253,820,167 39,643,104 ========= ========= \* The Company completed the acquisition of Northern Petroleum Exploration Limitedin January 2006. During the period, 43,332,418 ordinary shares of 0.1p each were issued at 5ppursuant to the exercise of warrants. 7. Reserves Movements in the share premium and profit and loss account during the periodwere as follows: Share premium Profit and loss £ £ At 1 July 2005 5,020,634 (401,132)Issue of shares 2,248,502 -Retained losses - (561,198)Exchange differences - 41,809 ________ _______ At 31 December 2005 7,269,136 (920,521) ====== ======= 8. Reconciliation of movements in shareholders' funds - equity only Six months to Year ended 31-Dec-05 30-Jun-05 £ £ Loss for the period (561,198) (401,132)Dividends - - ________ ________ (561,198) (401,132) Share issues less costs 2,293,804 5,229,152Exchange differences 41,809 -Opening shareholders funds 4,828,020 - ________ ________ Closing shareholders' funds 6,602,435 4,828,020 ======= ======= 9. Reconciliation of operating loss to net cash outflow from operating activities Six months to Year ended 31-Dec-05 30-Jun-05 £ £ Group operating loss before interest (601,529) (418,040)Increase in debtors (325,499) (57,418)Increase in creditors (45,887) 54,458Goodwill (credited)/charged (34,437) 10,553Loss on disposal of current asset investments 38,439 -Increase in value of current assets investments (51,271) -Depreciation 1,765 -Exchange differences 41,809 ________ ________Net cash outflow from operating activities (976,610) (410,447) ======= ======= 10. Analysis of changes in net funds 1 July 2005 Cash flow 31 December 2005 £ £ £Cash at bank and in hand 3,673,353 (366,952) 3,306,401 ======= ======= ======= 11. Acquisitions During the period, the Company acquired the following subsidiariesSubsidiary undertakings Principal activity Percentage of ordinary share capital held PEOS AG Oil and gas exploration 100%Ascent Resources Italiana S.r.l Oil and gas exploration 100% These purchases have been accounted for using acquisition accounting. Date of acquisitions Financed by shares Total consideration £ £PEOS AG 22 July 2005 58,755 58,755 ========= ======= === ==== The aggregate assets and liabilities acquired were:Assets Fair value £Cash at bank 35,972Other debtors 2,220 ________ 38,192LiabilitiesCreditors (38,665) ________Net liabilities acquired (473)Positive goodwill (Note 3) 59,228 ________Consideration 58,755 ======= Financed by Date of Cash Total Consideration acquisition £Ascent Resources Italiana S.r.l. 1 July 2005 1,563,803 1,563,803 ========= ======= =======The aggregate assets and liabilitiesacquired were: Fair value £AssetsExploration and appraisal expenditure 1,729,832Other debtors 653,670Cash and bank and in hand 41,561 ________ 2,425,063 LiabilitiesCreditors (7,782) ________Net assets acquired 2,417,281Negative goodwill (Note 3) (853,478) ________Consideration 1,563,803 ======= Ascent Resources Italiana S.r.l's principal assets are Cento and Bastiglia (twogas exploration permits totalling approximately 282,412 acres in the centralpart of Italy's Po Valley). 12. Subsequent Events The major events subsequent to 31 December 2005are set out in the Chairman's statement. * * ENDS * * Contacts: Jeremy Eng Ascent Resources plc Tel: 020 7251 4905 Hugo de Salis St Brides Media & Finance LtdTel: 020 7242 4477 This information is provided by RNS The company news service from the London Stock Exchange