8 Jun 2010 07:00
Embargoed for release: 0700 on 8 June 2010
Northern Petroleum Plc ("Northern Petroleum", "Northern", or the "Company") Audited Results for the Year Ended 31 December 2009
Northern Petroleum Plc, an independent oil and gas exploration, development andproduction company announces its audited results for the year ended 31 December2009.Highlights:Operational:
* At 31 December 2009 the Company had 102.9 million barrels of oil
equivalence of net proven and probable reserves, representing an increase
of 34.6% from the 76.4 barrels of oil equivalence reported at the end of
2008;
* At the end of 2009, production had increased to 1320 barrels of oil
equivalence per day (boepd) with the commissioning of two new gas fields in
The Netherlands. The production rate at the start of the year was 367 boepd
; and
* The Company conducted two seismic surveys during 2009, recording 3067km of
2D data and set up a 1520km2 3D survey which was recorded in early 2010.
Financial:
* The Company made a record capital investment of €29.7 million, to develop
its reserves and resources; * The Company made a post tax loss of €2.15 million for the year;
* At the end of 2009 the Company had €15 million of cash, plus €3.5 million
of working capital; and * The Company successfully completed the acquisition of the outstanding shares in ATI Oil Plc which it did not already own.
Outlook:
* Development of two further gas fields in the Netherlands is going to plan
with first production on schedule for 2010;
* The Company is developing plans to participate in the drilling of up to six
wells over the next 12 months; and
* The Company expects to have achieved a production rate in excess of 1,750
barrels of oil equivalence a day by the end of 2010.
RESULTS SUMMARY Year ended Year ended 31 December 31 December 2009 2008 €'000 €'000 Revenue 5,084 6,954 Gross profit 1,482 2,825 (Loss) / profit for the year (2,151) 9,914 Profit on disposal of tangible assets -
8,943
(Loss) / profit for the year adjusted for asset (2,151)
971sales Basic (loss) / earnings per share on result for the year (2.9) € cents 14.1 € cents Capital expenditure 29,707 3,686 Cash and cash equivalents 15,002 34,927 Other working capital 3,476 11,487 Net assets 73,764 63,545 Total Group distributable reserves 54,769 33,023 Production (million boe) 0.13 0.12
Average revenue, in currency of receipt, per boe:
Gas €33.45 €53.97 Oil $56.43 $90.44 Unaudited Net Commercial Oil & Gas Reserve
Quantities - Proven and Probable reserves (million boe) 102.88 76.43
Richard Latham, Chairman, commented:
"The world's economies may give us all some uncertainties, but as shareholders of Northern there are positive factors we should enjoy. Our strategies on technology, partnerships and low-cost acquisition of assets are now proving extremely effective in producing value.
* We have completed a highly successful hydraulic reservoir fracturing
programme and placed in production, at enhanced flow rates the first two of
six fields in our Netherlands' core area, Grolloo and the very much larger
Geesbrug.
* We captured five more Netherlands discoveries. It is expected that these
will add to our reserves and forecast levels of production.
* We have, together with Shell Italia, progressed our joint venture offshore
of Sicily, completing a 3D seismic survey within budget. The data is being
mapped with results due later this year.
* We made a successful offer for the acquisition of outstanding shares in ATI
Oil Plc.
* We have established, together with our co-venturer Providence Resources
Plc, a project in the UK to drill a long reach well with the potential to
immediately put into production the Baxters Copse oil discovery of 5.36
million barrels gross of 2P reserves.
* We have together with Tullow Oil had our confidence in the venture offshore
Guyane reinforced. Both Shell and Total have joined the project. A 2,500km²
3D seismic survey has been completed to set up the first well. * The oil price is back in the range of US$60-90 per barrel which is refuelling interest in our high impact assets offshore Italy.
""It is a time to perceive our glass to be better than half full. Northernfinished the year with an increase of 35 per cent in our Proven and ProbableReserves to 103 million barrels of oil equivalence. We now have 56 licences andapplications. By the end of 2010 we expect to have achieved a production ratein excess of 1,750 barrels of oil equivalence a day.
"In the year we report a small loss of €2.2 million. We invested €29.7 million of capital expenditure and started the current year with cash and working capital of €18.5 million.
"Our target is to increase production and revenues by bringing on-stream theWijk en Aalburg and Brakel gas fields and drilling further production wells inthe Netherlands. This will build a position of greater financial strength fromwhich to progress development of our very strong asset position and themultitude of projects that we have created. In the near term we mustdifferentiate between the many high impact offshore projects, requiring newpartners with the finance that they will bring, and those low risk and mediumimpact projects that we can progress ourselves."Our history shows that we have every reason to be confident that our strategyof building strong long-term relationships and alliances will enable us toexploit our resource potential and create shareholder value. We remain focusedon building within our core areas - areas with the potential to establish andexpand our presence to a size where we are a material player, and which canmake a very considerable impact on the Company's profits."In that context we have reviewed our position onshore south of England. It hasgood profit potential. We are pleased to look forward to the drilling of twowells in 2010 with at least one more in 2011. Two of the wells will targetproven and probable reserves and an independent audit has confirmed theirpotential . However, future expansion potential is considered to be less thanelsewhere in the Group portfolio. It may now be the time to realise the assetvalue we have created and redeploy those funds elsewhere in the business. Wehave successfully used this strategy of taking an early exit in Ireland andSpain and investing the funds elsewhere."In The Netherlands, where considerable achievements were made in 2009, we arecompleting the first stage of the development of our initial six fields beforeincreasing production through the drilling of one or more further wells in mostof these fields. We correctly assessed that we could add further fields anddiscoveries within this core area. In the next phase we intend to develop twogas fields on the newly awarded Zuid Friesland production licence together withour partners EBN, Dyas, NAM, PetroCanada and Total."We are also enthused by the potential of three undeveloped discoveries in ourUtrecht licence where we have now been joined by the state owned company, EBN.It is the first time that EBN has elected to enter into the exploration phaseof any onshore licences. We value their strong support.
"The Northern technical team is generating new exploration concepts in The Netherlands. We continue our relationship with NAM through discussion on the mutual benefits of our development of some of their past discoveries.
"Gratifyingly in Italy, which holds the greatest potential of all, we have continued to build and develop our evaluation of a number of core areas. 2009 saw both the acquisition of the outstanding shares in ATI Oil Plc and new preliminary licence awards making encouraging prospective additions to core areas.
"We have been an industry leader in several regions of Italy in identifying andthen acquiring key licences in prospective areas and have been a catalyst inrevitalising oil industry interest in Italy. Our foresight, good relations withthe Italian authorities and track record of commercial partnerships are nowpaying off. We have developed a position of strength at costs within our meansthrough examination of well logs, reprocessing existing seismic data andundertaking new seismic surveys. Our valuable offshore licences have thepotential to attract major industry players who recognise their high futurepotential profitability that more than justifies the cost of farming in at theexploration or development stage."As Northern's operations and prospects grow, the Board recognises that itscapacity must also grow. Changes have been made to ensure that we have thestrengths to capitalise on our opportunities. Nigel Wright has recently beenappointed Finance Director. He has brought with him a wealth of experience inthe petroleum industry. He takes over the role from Chris Foss who, in his newrole as Director of Legal & Corporate Affairs, will use his seven years ofexperience with us, to assist the Managing Director in the implementation anddelivery of the corporate strategic plan. All of our employees deserve to haveour thanks for the commitment they have shown in the past challenging butsuccessful twelve months.
"With the quality and scale of our prospects, we will respond to the challenges and opportunities and we will realise value from our considerable asset base."
In accordance with the AIM Rules - Guidance for Mining and Oil & Gas Companies,the information contained in this announcement has been reviewed and signed offby the Exploration and Technical Director of Northern, Mr Graham Heard CGeolFGS, who has over 35 years experience as a petroleum geologist. - Ends - Enquiries:Northern Petroleum PlcNigel Wright, Finance DirectorGraham Heard, Exploration and Technical DirectorSophie Hull, Head of Corporate CommunicationsTel: +44 (0) 20 7469 2900/67Cenkos Securities (NOMAD and Joint Broker)Jon FitzpatrickTel: +44 (0) 20 7397 8900Ken FlemingTel: +44 (0) 131 220 6939Jefferies International (Joint Broker)Chris SnoxallTel: +44 (0) 20 7029 8000Financial DynamicsBilly Clegg / Edward WestroppTel: +44 (0) 20 7318 3113Notes to Editors:
Further information on Northern is available at www.northpet.com
Consolidated Income StatementFor the year ended 31 December 2009 Year Year ended ended 31 31 December December 2009 2008 Notes €'000 €'000 Revenue 5,084 6,954 Production costs (2,077) (1,752) Depletion and amortisation - property, (1,525) (2,377)plant & equipment Cost of sales (3,602) (4,129) Gross profit 1,482 2,825 Pre-licence costs (847) (463) Administrative expenses - other (2,565)
(1,774)
Administrative expenses - share (1,927) (137)incentives Administrative expenses - total (4,492) (1,911) Other operating income - 57 Profit on disposal of tangible assets -
8,943
Deemed profit on disposal of associate -
1
(Loss) / profit from operations (3,857) 9,452 Finance charges (552) (711) Finance income 1,365 2,959 Share of operating loss of joint (80) (142)ventures & associates (Loss) / profit before tax (3,124) 11,558 Tax credit / (expense) 973 (1,644) (Loss) / profit for the year (2,151) 9,914
Basic earnings per share on (loss) / 3 (2.9)
14.1profit for the year cents cents
Diluted earnings per share on (loss) / 3 (2.9)
13.5
profit for the year cents
cents
All results are from continuing activities and are attributable to equity shareholders of the parent.
Consolidated Statement of Comprehensive IncomeFor the year ended 31 December 2009 Year ended Year ended 31 31 December December 2009 2008 €'000 €'000 (Loss) / profit for the year (2,151) 9,914 Exchange differences on translation of (41) (2,187)foreign operations Other comprehensive income for the year, (41) (2,187)net of income tax Total comprehensive income for the year (2,192)
7,727
All amounts are attributable to equity shareholders of the parent.
Consolidated Statement of Financial Positionat 31 December 2009 2009 2008 Notes €'000 €'000 Assets Non-current assets Intangible assets 4 27,880 12,369 Property, plant and equipment 5 45,895 12,498 Investments in joint ventures 259 70 Investments in associates 15 13 Loans and other receivables 118 5,613 74,167 30,563 Current assets Inventories 98 55 Trade and other receivables 6 14,376 21,249 Cash and cash equivalents 15,002 34,927 29,476 56,231 Total assets 103,643 86,794 Liabilities Current liabilities Trade and other payables 8,103 5,949 Corporation tax liability 2,895 3,868 10,998 9,817 Non-current liabilities Trade and other payables 169 74 Provisions 9,564 6,697 Deferred tax liabilities 9,148 6,661 18,881 13,432 Total liabilities 29,879 23,249 Net assets 73,764 63,545 Capital and reserves Share capital 7 4,983 4,488 Share premium 194 23,964 Merger reserve 10,289 - Special reserve 28,410 4,544(Distributable) Special reserve 173 154(Un-distributable) Share incentive plan 3,865 2,384reserve Foreign currency (509) (468)translation reserve Retained earnings 26,359 28,479 Total equity 73,764 63,545
All amounts are attributable to equity shareholders of the parent.
REGISTERED NO. 02933545
Consolidated Statement of Cash Flowsfor the year ended 31 December 2009 Year ended Year ended 31 December 31 December 2009 2008 €'000 €'000
Cash flows from operating activities
(Loss) / profit before tax (3,124) 11,558 Depletion and amortisation 1,525 2,377
Depreciation - non oil and gas property, 181
204plant and equipment Profit on disposal of property, plant and equipment - (8,937) Foreign exchange gain (567) (898) Finance income (798) (2,061) Finance charges 552 711 Share based payments 1,210 442
Expenses settled by issue of shares 63
64
Share of operating loss in associate 80
142
Deemed profit on disposal of associate -
(1)
Net cash (outflow) / inflow before movements in (878) 3,601working capital
(Increase) / decrease in inventories (43)
45
Decrease / (increase) in trade and 9,831 (5,635)other receivables Increase in trade and other payables 2,127
2,064
Net cash inflow / (outflow) from changes in 11,915 (3,526)working capital Taxes paid (964) -
Net cash inflow from operating activities 10,073
75
Cash flows from investing activities
Interest received 178 1,485 Interest paid (69) (10) Purchase of property, plant and equipment (16,939)
(1,915)
Sale of property, plant and equipment -
8,989
Expenditure on exploration and (12,768) (1,771)evaluation assets
Investment in joint venture company (183)
(87) Loans to joint ventures and - (144)associated companies
Acquisition costs of ATI net of cash (727)
-
and cash equivalents acquired (note 8) Net cash (outflow) / inflow from (30,508) 6,547investing activities
Cash flows from financing activities Proceeds from the exercise of equity warrants 60
35
Net cash inflow from financing activities 60
35
Net (decrease) / increase in cash and (20,375) 6,657cash equivalents Cash and cash equivalents at start of year 34,927
28,929
Effect of exchange rate movements 450
(659)
Cash and cash equivalents at end of year 15,002
34,927
Other than the ATI acquisition (note 8) there have been no significant non-cash transactions during the year.
Consolidated Statement of Changes in Equityfor the year ended 31 December 2009 Share Foreign Share incentive currency Share premium Merger Special plan translation Retained capital account reserve reserves reserve reserve earnings Total €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 At 1 January 2008 4,468 23,885 - 4,698 3,200 1,719 17,307 55,277 Total comprehensive income for the year - - - - - (2,187) 9,914 7,727 Issue of shares during 20 79 - - - - - 99the year Equity share warrants exercised - - - - (1,258) - 1,258 - Share based payments - - - - 442 - - 442 At 31 December 2008 4,488 23,964 - 4,698 2,384 (468) 28,479 63,545 Total comprehensive income for the year - - - - - (41) (2,151) (2,192) Cancellation of share premium - (23,885) - 23,885 - - - -account Issue of shares during 8 115 - - - - - 123the year ATI 487 - 10,289 - 302 - - 11,078acquisition Equity share warrants - - - - (31) - 31 -exercised Share based payments - - - - 1,210 - - 1,210 At 31 December 2009 4,983 194 10,289 28,583 3,865 (509) 26,359 73,764
All amounts are attributable to equity shareholders of the parent.
Notes to the Group Financial Statementsat 31 December 2009
1. BASIS OF PREPARATION
The financial information set out above does not constitute the Company'sstatutory accounts for the years ended 31 December 2009 or 2008 but is derivedfrom those accounts. Statutory accounts for 2008 have been delivered to theRegistrar of Companies, and those for 2009 will be delivered in due course. Theauditors have reported on those accounts; their reports were (i) unqualified,(ii) did not include a reference to any matters to which the auditors drewattention by way of emphasis without qualifying their report and (iii) did notcontain a statement under section 237 (2) or (3) of the Companies Act 1985 inrespect of the accounts for 2008 nor a statement under section 498 (2) or (3)of the Companies Act 2006 in respect of the accounts for 2009.
Going concern basis of preparation
After consideration of the guidance provided to company directors by theFinancial Reporting Council (FRC) in the document "Going Concern and LiquidityRisk: Guidance for Directors of UK Companies 2009" the Directors consider theuse of the going concern basis of accounting is appropriate for the Companybecause no material uncertainties related to events or conditions that may castsignificant doubt about the ability of the Company to continue as a goingconcern have been identified by the Directors.The Company has processes in place in order to ensure a reasonable cash balanceis maintained at all times. The Company continually monitors its cash balancesand these are reported to the Board at least weekly. The Board also reviews theforecast cash balance at the end of each of the next twelve months on a rollingbasis. Before making a decision to add new commitments the Board considers therisks to the delivery of these cash forecasts.The Group has created a substantial range of projects and opportunities. TheGroup can only fund a very small portion of these opportunities from itscurrent cash balances. Projects will be funded from cash flow from production,whilst others will have to wait on cash created by trading of assets, such asthe UK assets, and other projects will require farming out before they canprogress. The Group has no external debt but now has the production and reservebase to obtain debt and the Board is considering using this capacity to fundsome projects. In addition the Company has authority from its shareholders toraise cash by the issue of new shares to fund its programmes.After making enquiries, the Directors have a reasonable expectation that theGroup has adequate resources to meet all its commitments and to continue inoperational existence for the foreseeable future. Accordingly they continue toadopt the going concern basis in preparing the Annual Report and Accounts.
2. ACCOUNTING POLICIES
The financial information presented in this results announcement for the yearended 31 December 2009 has been prepared in accordance with InternationalAccounting Standards and International Financial Reporting Standards as adoptedby the European Union at 31 December 2009.
The principal accounting policies applied in the preparation of these consolidated group financial statements are set out in the 2008 Annual Report. These policies have been consistently applied to all the years presented, unless otherwise stated.
Changes in accounting policies
In the current year, the following new and revised standards and Interpretations have been adopted but have had no effect on the amounts reported in these group financial statements.
IAS 1 - Presentation of Financial Statements:
In September 2007, the IASB issued Amendments to IAS 1 `Presentation ofFinancial Statements' - A Revised Presentation, which requires separatepresentation of owner and non-owner changes in equity by introducing thestatement of comprehensive income. The statement of recognised income andexpense will no longer be presented. Whenever there is a restatement orreclassification, an additional balance sheet, as at the beginning of theearliest period presented, will be required to be published. The revisedstandard is effective for annual periods beginning on or after 1 January 2009and the Group has adopted it from that date. There is no effect on the Group'sreported income or net assets. IAS 1 Revised has been adopted by the EU.
Other standards and interpretations adopted in the year had no significant impact on these group financial statements.
3. (LOSS) / EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing profit for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing profit for theperiod attributable to ordinary equity holders of the parent by the weightedaverage number of ordinary shares outstanding during the year, plus theweighted average number of shares that would be issued on the conversion ofdilutive potential ordinary shares into ordinary shares. The calculation of thedilutive potential ordinary shares related to employee and director shareoption plans includes only those warrants with exercise prices below theaverage share trading price for each period. 2009 2008 €'000 €'000 Net (loss) / profit attributable to equity (2,151)
9,914
holders used in basic calculation Net (loss) / profit attributable to equity (2,151)
9,914
holders used in dilutive calculation
Number Number `000 `000 Basic weighted average number of 75,184 70,538shares Dilutive potential of ordinary shares: Warrants exercisable under - 2,963Company schemes Diluted weighted average number 75,184
73,501
of shares
The calculation of the diluted EPS assumes all criteria giving rise to the dilution of the EPS are achieved.
4. INTANGIBLE EXPLORATION AND EVALUATION ASSETS
Intangible assets consist of the Group's exploration projects which are pendingdetermination of technical feasibility and commercial viability of extracting amineral resource. United Kingdom Italy Netherlands Other EU Total €'000 €'000 €'000 €'000 €'000 Cost: At 1 January 2009 3,940 2,617 5,805 173 12,535 Additions 279 4,751 7,948 - 12,978 Acquisition through business - 2,374 - - 2,374combination Transfers (24) - - 24 - Exchange movement 284 (113) - (9) 162 At 31 December 2009 4,479 9,629 13,753 188 28,049 Exploration expenditure written off: At 1 January 2009 39 - 99 28 166 Exchange movement 3 - - - 3 At 31 December 2009 42 - 99 28 169 Net book value: At 31 December 2009 4,437 9,629 13,654 160 27,880
5. PROPERTY, PLANT AND EQUIPMENT
a. Oil and Gas Assets Oil Oil Oil and Oil Oil and Gas and Gas Gas and Gas and Gas Assets Assets Assets Assets Assets (Netherlands) (Netherlands) (UK) - (UK) - (Italy)- Total - Developed - Undeveloped Developed Undeveloped
Undeveloped €'000 €'000 €'000 €'000 €'000 €'000 Cost: At 1 January 7,458 8,970 234 688 335 17,6852009 Additions 2,571 15,854 2 541 200 19,168 Acquisition through - - - - 15,844 15,844business combination Transfers 12,014 (12,014) 501 (501) - - Exchange - - 8 50 (27) 31movement At 31 December 22,043 12,810 745 778 16,352 52,7282009 Depletion and amortisation: At 1 January 5,562 - 110 - - 5,6722009 Charge for the 1,173 - 62 - - 1,235year Impairment loss - - 290 - - 290 Exchange - - 4 - - 4movement At 31 December 6,735 - 466 - - 7,2012009 Net book value: At 31 December 15,308 12,810 279 778 16,352 45,5272009 Net book value: At 31 December 15,308 12,810 279 778 16,352 45,527 2009 b. Non Oil and Gas Assets Computer Leasehold and Office Total improvements equipment €'000 €'000 €'000 Cost: At 1 January 2009 303 537 840 Additions - 64 64 At 31 December 2009 303 601 904 Depreciation: At 1 January 2009 102 253 355 Charge for the year 76 105 181 At 31 December 2009 178 358 536 Net book value: At 31 December 2009 125 243 368
6. TRADE AND OTHER RECEIVABLES
2009 2008 €'000 €'000 Non-current assets Other receivables - 3,720 Loans 118 1,893 118 5,613 Current assets Trade receivables 1,590 3,609 Other receivables 4,208 4,539 Corporation tax 144 - VAT recoverable 3,530 576 Prepayments and accrued income 4,904 12,525 Total trade and other 14,494 26,862receivables
€4,000,000 included in other receivables represents the final instalment of theStrategic Alliance fee from Dyas B.V. ("Dyas") which fell due and was settledin April 2010. A loan of $200,000 (€139,000 net of fair value discount of €21,000, (2008: €110,000 net of fair value discount of €34,000) has been made toNorthpet Investments Limited to be used to fund drilling expenditure incurredon the Guyane licence. In addition, the prior year loans balance included anamount of €1,783,000 representing the discounted value of a loan to ATI OilPlc. Control of ATI Oil Plc was acquired by the Group during 2009.7. SHARE CAPITAL 2009 2008 €'000 €'000 Authorised: 311,316,404 (2008:311,316,404) ordinary shares of 5p 19,648 19,648each
Allotted, issued, called up and fully paid: 78,987,248 (2008:71,142,059) ordinary shares of 5p 4,983 4,488each
The ordinary shares above all hold the same voting rights and there are no restrictions on the distribution of dividends.
Cancellation of share premium
On 30 June 2009 the Company delivered to Companies House the Order of Courtfollowing The High Court of Justice, Chancery Division having confirmed thecancellation of the amount standing to the credit of the share premium accountof the Company as at 31 December 2007, being £18.923 million (€23.885 million).The Order of Court was registered by Companies House on 8 July 2009 (the"Effective Date"). The creditors of the Company as at the Effective Date areprotected by the transfer of the applicable balance to the Company'sun-distributable special reserve. This reserve will be reduced, and theapplicable balances transferred to the Company's distributable special reserve,upon settlement of those creditors, and this will have the effect ofsignificantly increasing the Company's distributable reserves going forward.8. ATI OIL PLC ACQUISITIONOn 24 June 2009 the Company acquired control of all of the ordinary sharecapital of ATI Oil Plc ("ATI") that the Group did not already own. A total of7,698,267 new Northern shares were issued fully paid at 120p per share, beingthe closing market price on 23 June 2009, to ATI shareholders and warrantholders, with trading in the new Northern shares commencing on 25 June 2009.
The notional "share premium" on the shares issued in consideration for the takeover of ATI Oil Plc, evaluated at the issue price less the nominal value of those shares issued has been credited to the merger reserve.
The acquisition of ATI increased oil reserves by 26.58 million barrels and brought fuller control of the Group's position in Italy where ATI held a 50% economic interest in most of the licences operated by Northern.
Due to the inherently uncertain nature of the oil and gas industry, andexploration and evaluation assets in particular, the assumptions underlying theassigned values below are significantly judgemental in nature. The acquisitionconsideration below is considered equal to the aggregate of the fair values ofthe assets and liabilities acquired, with fair value adjustments recorded asdeemed appropriate. Deferred tax has been recognised, where applicable, inrespect of any fair value adjustments made.Effect of the acquisition:Consideration: 24 June 2009 €'000 Ordinary shares 10,776
Replacement share based payment awards - value of
302past service 11,078 Acquisition costs 745 11,823
Identifiable assets acquired and liabilities assumed:
24 June 24 June 24 June 2009 2009 2009 Pre-acquisition Fair Recognised carrying value values on amount adjustments acquisition €'000 €'000 €'000 Intangible assets 2,374 - 2,374
Property, plant and equipment - oil 559 15,285
15,844& gas assets
Trade and other receivables 261 -
261 Cash and cash equivalents 18 - 18 Trade and other payables (1,008) - (1,008) Loans (ATI - Northern loan) (2,333) - (2,333) (129) 15,285 15,156 Deferred tax liability - (3,333) (3,333) (129) 11,952 11,823The uplift on acquisition of "Property, plant and equipment - oil & gas assets"of €15.285 million equates to a fair value of €0.60 per barrel of probable oilreserves. The Directors consider that this was, and remains, an appropriatevaluation given the early stages of development of the Rovesti and Giovefields.
No goodwill has been recognised as result of the acquisition.
The Group incurred acquisition related costs of €745,000 relating to professional advisors' fees and fees directly related to the scheme of arrangement under which ATI was acquired. These fees have been included in the cost of the acquisition.
The revenue and expenses incurred from this operation since the date ofacquisition (24 June 2009) were €Nil and €226,000 respectively. Of the €226,000expenses, €200,000 relates to payments in respect of termination of contractsmade to non continuing ATI Directors. Cash outflow from the operation postacquisition was €26,000. If the acquisition had occurred on 1 January 2009,management estimates that consolidated revenue would have been unchanged andthe consolidated loss for the year would have been €106,000 greater.The terms of the acquisition agreement required the Group to exchange ATIwarrants (the acquiree's awards) for Northern warrants (the replacementawards). Details of the acquiree's awards and replacement awards are asfollows: Acquiree's award Replacement awards Terms and conditions Fully vested Fully vested
Market-based measure at acquisition date €302,000 €302,000
The Group has included €302,000 as consideration transferred related to the fair value of the replacement awards.
9. APPROVAL BY DIRECTORS
The results for the year ended 31 December 2009 were approved by the Directors on 7 June 2009.
10. ANNUAL REPORT AND ACCOUNTS
The Annual Report and Accounts will today be made available in electronicformat on the Company's website, www.northpet.com, and will shortly be postedto shareholders. Following posting, the Annual Report will also be availablefree of charge for a period of not less than one month by application to theCompany Secretary at the Company's registered office being Martin House, 5Martin Lane, London, EC4R 0DP.
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