27 Sep 2007 07:00
Embargoed for release: 0700 on 27 September 2007
Northern Petroleum Plc ("Northern", "the Group" or "the Company") Interim Results to 30 June 2007 and IFRS Restatement Financial highlights: Six months to Six months to June 2007 June 2006 (restated) Profit before ‚£8.51m ‚£(0.96)mtax Earnings per share (basic) 10.54p (1.66)p Cash generated from ‚£12.82m ‚£(0.1)moperations Cash plus long term debtor ‚£33.54m ‚£20.32m Second half outlook: * Crystallisation of the benefit from the partial sale of Netherlands onshore assets to Dyas B.V. realising ¢â€š¬18 million cash, already in hand, plus producing and development assets; and * Recognition of revenue with effect from 1 January 2007 from P12 gas field.
Operational highlights - 2007:
* First Netherlands production of 269 million cubic feet of gas (with a further 207 million cubic feet of attributable production from P12 gas field); * Activities and progress on developing six Netherlands fields accelerated after final transfer of licences from NAM; * Development operations undertaken at Brakel and Ottoland, with the Ottoland-1 (sidetrack) well testing oil at unstabilised rates of up to 1,447 bopd; * Competent Persons Reports on Southern Adriatic oil discoveries due shortly; and * Strategic Alliance with Dyas B.V. has commenced reviewing agreed opportunities.
For further information please contact:
Northern Petroleum Plc Tel: +44 (0) 20 7743 6080Derek Musgrove, Managing DirectorChris Foss, Finance DirectorGraham Heard, Exploration & Technical DirectorBishopsgate Communications Limited Tel: +44 (0) 20 7562 3350Fran Read / Maxine BarnesChairman's Statement
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Summary of Results
I am delighted to report that the results for the Group for the six months ending 30 June 2007 show a pre tax profit of ‚£8.51 million compared to a (restated) loss of ‚£0.96 million for the six months ending 30 June 2006. The main contributing factor to the significant improvement in the result for the period is the inclusion, within other operating income, of the Dyas B.V. ("Dyas") Strategic Alliance fee of ¢â€š¬14 million. Profitability has also been boosted by a six month contribution from the Waalwijk gas field that was acquired with an effective date of 1 January 2007, and by the rise in the Group's financial income as a result of its enhanced cash balances. Of our net overheads, approximately ‚£0.79 million (45%) comprises charges in relation to share based incentives that have arisen due to the significant increase in the Company's share price from 103.5p to 195.5p over the period.
These results are the first to be produced under International Financial Reporting Standards ("IFRS"). The comparative results for the six months to 30 June 2006 and the year to 31 December 2006 have been restated to IFRS. The net effect on the income statements are small increases in the loss attributable to equity holders of ‚£20,000 and ‚£50,000 for the respective periods. Taking into account all previous financial years the overall effect of IFRS is to reduce net assets and increase retained losses of the Group by only ‚£0.25 million, which demonstrates the Group's business model of predominantly building the exploration part of its portfolio by licence application at low cost rather than through acquisitions. The restated primary statements for earlier periods are detailed within note 8, "Transition to IFRS", of the interim statement.
The balance sheet has strengthened during the period under review and shareholders can also expect that the Group will show a further benefit, and an increase in net assets, in the second half of 2007 when the profitable asset transactions with Dyas are expected to complete with the final transfer of the licences. Turnover and operating profit will also be boosted by a contribution from the P12 gas field from an effective date of 1 January 2007. As at 30 June 2007, the ¢â€š¬20.35 million consideration, of which ¢â€š¬18 million was in cash, has already been received in respect of those asset sales and is separately disclosed on the Consolidated balance sheet as a "Payment in advance".
Overview
Our strategy as a company has been limited to low risk political areas. As I take an overview of world events in the oil industry and outside, I am pleased that we are not deployed in areas where there are risks of Government confiscation, whatever the euphemism used.
I feel that larger companies will soon be forced to move towards our approach and our projects, which will aid our realisation of values.
The Company's business model is simply defined as identifying value opportunities, adding value and realising those added values. We started many of our projects early, still during the period of low oil and gas pricing, which has enabled the building of a large project base. We are now increasingly moving into the adding value and realising value phases.
In the Netherlands the deal with Dyas covering 25% of our interests in six oil and gas discoveries is such an example of realising some of the profit, and it adds substantially to our financial resource to enable more projects to progress. The process continues for realising value from our remaining interests in the six oil and gas fields through their development, with "value realisation" in the form of production income.
Upcoming projects include two oil discoveries of particular interest in the southern Adriatic, Giove and Rovesti. The evaluation of their potential reserves and value is underway. There is also the required workover of the Ottoland-1 (sidetrack) well which tested oil at unstabilised rates of up to 1,447 bopd and the oil field will then be put on production as soon as possible in 2008. In the UK there is the planned 2008 drilling of the Markwells Wood prospect, seen as the eastward extension of the Horndean oil field.
The Company now faces these activities with a stronger financial position than ever before, and can look past the current jitters in the capital markets even whilst developing six Netherlands fields with the assistance of Standard Bank.
Our exploration efforts can also continue within this financial comfort with several projects in the Netherlands and at Savio where, working with Stratic Energy and ATI Oil, we have identified a 100 bcf gas prospect in the same formation as the discoveries of Grove Energy and Agip/Eni which are soon to be developed.
Our position is very satisfactory. We are well prepared with projects and finance, and have continued to expand our highly competent technical and management team. Upon this base, I perceive that a period of substantial growth lies before us.
Richard LathamChairman27 September 2007
Consolidated income statement for the six months ended 30 June 2007
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6 months 6 months 6 months 6 months Year ended ended ended ended ended 30 30 30 30 31 June June June June December 2007 2007 2007 2006 2006 As restated As restated (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Acquisitions Continuing Total operations ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Revenue 1,100 82 1,182 105 227 Production costs (259) (14) (273) (27) (44) Depreciation, depletion (588) (84) (672) (30) (125)and amortisation Cost of sales (847) (98) (945) (57) (169) Gross profit / (loss) 253 (16) 237 48 58 Administrative expenses - (972) (972) (755) (1,732) Administrative expenses - - (786) (786) (387) (523)share incentives (Note 3) Other operating income - 9,614 9,614 71 143(Note 4) - 7,856 7,856 (1,071) (2,112) Profit / (loss) from 253 7,840 8,093 (1,023) (2,054)operations Share of operating loss in (62) (73) (110)associates Total profit / (loss) from operations: Group and share associates 8,031 (1,096) (2,164) Finance income 377 91 415 Other finance gains 87 - - Share of disposal of 19 44 45subsidiary and associates Profit / (loss) before 8,514 (961) (1,704)taxation Tax expense (1,100) - - Net profit / (loss) for 7,414 (961) (1,704)the financial period Basic profit / (loss) per share on profit / (loss) for the 10.54p (1.66)p (2.66)pperiod (Note 5) Diluted profit / (loss) per share on profit / (loss) for the 9.65p (1.66)p (2.66)pperiod (Note 5)
All amounts are attributable to equity shareholders of the parent.
Consolidated balance sheet at 30 June 2007__________________________________________________________________________________________ At 30 June At 30 June At 31 December 2007 2006 2006 As restated As restated (Unaudited) (Unaudited) (Unaudited) Note ‚£'000 ‚£'000 ‚£'000 Non-current assets Exploration and evaluation assets 7,131 3,270 6,643
Property, plant and equipment 6 7,241 1,193 2,146
Investments in joint ventures: Share of gross assets of joint 40 11 14ventures Share of gross liabilities of joint (40) (11) (14)ventures - - - Share of net assets of associates 87 164 130 Trade and other receivables 5,793 - - 20,252 4,627 8,919 Current assets Inventories 27 27 27 Trade and other receivables 7,627 873 2,568 Cash and cash equivalents 24,678 20,320 15,954 32,332 21,220 18,549 Total assets 52,584 25,847 27,468 Non-current liabilities Trade and other payables 58 - - Provision for liabilities and 1,845 233 230charges 1,903 233 230 Current liabilities Trade and other payables 4,118 1,567 3,381 Corporation tax liability 1,100 - - Payment in advance 7 13,755 - - 18,973 1,567 3,381 Total liabilities 20,876 1,800 3,611 Net assets 31,708 24,047 23,857 Capital and reserves Share capital 3,525 3,481 3,511 Share premium account 18,684 18,307 18,529 Special reserve (distributable) 3,599 3,591 3,599 Special reserve (undistributable) 122 130 122 Share incentive plan reserve 523 126 295 Foreign currency translation reserve 61 6 42 Retained earnings 5,194 (1,594) (2,241) Total equity 31,708 24,047 23,857
All amounts are attributable to equity shareholders of the parent.
Consolidated cash flow statement for the six months ended 30 June 2007
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6 months 6 months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 Note As restated As restated (Unaudited) (Unaudited) (Unaudited) ‚£'000 ‚£'000 ‚£'000 Net cash inflow / (outflow) from Below 12,817 (98) (361)operating activities Cash flows from investing activities Interest received 377 91 415 Purchase of property, plant and (4,113) (341) (1,548)equipment Expenditure on exploration and (561) (292) (3,751)evaluation assets Net cash outflow used in investing (4,297) (542) (4,884)activities Cash flows from financing activities Issue of ordinary shares - 18,930 18,951 Exercise of share options and 169 120 351warrants Net cash inflow from financing 169 19,050 19,302activities Net increase in cash and cash 8,689 18,410 14,057equivalents Cash and cash equivalents at start 15,954 1,904 1,904of period Effect of exchange rate changes on 35 6 (7)cash and cash equivalents Cash and cash equivalents at end of 24,678 20,320 15,954period
Reconciliation of operating profit to net cash inflow from operating activities
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6 months 6 months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 As As restated restated ‚£'000 ‚£'000 ‚£'000 Profit / (loss) from operations 8,093 (1,023) (2,054) Depreciation, depletion and amortisation 672 30 132 Depreciation - non oil and gas tangible 34 15 41assets Foreign exchange (gain) / loss 71 - 47 Increase in short term loan receivable (500) - (750) Share based payments (Note 3) 249 40 311 Profit / (loss) from operations before 8,619 (938) (2,273)changes in working capital
(Increase) / decrease in trade and other (10,352) 287 (742) receivables
Increase in trade and other payables 14,550 553 2,654
Net cash inflow / (outflow) from operating 12,817 (98) (361) activities
Consolidated statement of recognised income and expense for the six months ended 30 June 2007
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6 months 6 months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 As restated As restated (Unaudited) (Unaudited) (Unaudited) ‚£'000 ‚£'000 ‚£'000 Income and expense recognised directly in equity As previously stated (1,945) (430) (430)
IFRS implementation adjustments (Note 8) (296) (203) (210)
As restated (2,241) (633) (640) Transfer between reserves for share 21 - 103warrants exercised during period (2,220) (633) (537)
Profit / (loss) for the financial period 7,414 (961) (1,704)
Total recognised income and expense for 5,194 (1,594) (2,241) the financial period
All amounts are attributable to equity shareholders of the parent.
Consolidated statement of changes in equity for the six months ended 30 June 2007
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6 months ended 6 months Year ended ended 30 June 30 June 31 December 2007 2006 2006 As restated As restated (Unaudited) (Unaudited) (Unaudited) ‚£'000 ‚£'000 ‚£'000 Opening balance 24,111 6,116 6,116 IFRS implementation adjustments (254) (204) (204)(Note 8) Opening balance as restated 23,857 5,912 5,912 Total recognised income for the 7,414 (961) (1,704)period Issue of shares 169 20,124 20,376 Share issue costs - (1,074) (1,074) Employee share options charged to income statement (Note 3) 249 40 311 Foreign exchange gain 19 6 36 Closing balance 31,708 24,047 23,857
All amounts are attributable to equity shareholders of the parent.
Notes forming part of the interim report for the six months ended 30 June 2007
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1. Basis of preparation
The period beginning 1 January 2007 is the first period for which it became mandatory for the Group to comply with International Financial Reporting Standards ("IFRS").
The financial results of the Group for the six months ended 30 June 2007 have been prepared on a basis which is consistent with International Financial Reporting Standards as adopted by the European Union which the Group expect to apply in the first annual audited accounts presented as at 31 December 2007. Comparative information for 2006 has been restated under IFRS.
This interim report has been prepared on a basis consistent with the Group's anticipated 2007 accounting policies. These accounting policies are the same as those set out in the Group's Annual Report & Accounts 2006, save for new accounting policies for oil and gas assets, (see note 2 below). Copies of the Group's Annual Report and Accounts 2006 are available from the Group's website (www.northpet.com) or from its registered office.
Despite a `stable platform' currently being in place, it is possible that the restated information presented in this document may be subject to change prior to its inclusion in the 2007 Annual Report and Accounts which will include the Group's first annual financial statements under IFRS. Such changes may occur due to interpretive guidance issued by the International Financial Reporting Interpretation Committee ("IFRIC") or to align to developing industry practice.
The financial information presented in this report is unaudited. These interim financial statements do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The comparative figures for the financial year ended 31 December 2006 have been abridged from the Group's statutory accounts for that financial year, translated from United Kingdom Generally Accepted Accounting Principles ("UK GAAP") to IFRS. The UK GAAP version of those accounts have been reported on by the Group's auditors and delivered to the Registrar of Companies. The auditors' report on those UK GAAP 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 any statement under section 237(2) or (3) of the Companies Act 1985.
2. Accounting Policies
The Group's existing accounting policies as set out in the Annual Report and Accounts 2006, save for the exceptions detailed below, are consistent with IFRS and remain unchanged.
In order to comply with IFRS the Group has adopted the following new accounting policies:
Oil and gas assets
Oil and gas assets: exploration and evaluation
The group has for the time being continued to apply the full cost method of accounting for Exploration and Evaluation ("E&E") costs, having regard to the requirements of IFRS 6 `Exploration for and Evaluation of Mineral Resources'. Under the full cost method of accounting, costs of exploring and evaluating oil & gas properties are accumulated and capitalised by reference to appropriate cost pools. The company has cost pools by country: Italy, The Netherlands, United Kingdom, and Other EU.
E&E costs are initially capitalised within `Intangible assets'. Such E&E costs may include costs of licence acquisition, technical services and studies, seismic acquisition, exploration drilling and testing, but do not include costs incurred prior to having obtained the legal rights to explore an area, which are expensed directly to the income statement as they are incurred.
Intangible E&E assets related to each exploration licence/prospect are not depreciated and are carried forward until the existence (or otherwise) of commercial reserves has been determined. The Company definition of commercial reserves for such purpose is proven and probable reserves on an entitlement basis.
If commercial reserves have been discovered, the related E&E assets are assessed for impairment on a cost pool basis as set out below and any impairment loss is recognised in the income statement. The carrying value, after any impairment loss, of the relevant E&E assets is then reclassified as development and production assets within Property, plant and equipment.
Notes forming part of the interim report for the six months ended 30 June 2007
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Oil and gas assets: exploration and evaluation (continued)
Intangible E&E assets that relate to E&E activities that are determined not to have resulted in the discovery of commercial reserves remain capitalised as intangible E&E assets at cost less accumulated amortisation, subject to meeting a pool-wide
impairment test as set out below. Such E&E assets are amortised on a unit of production basis over the life of the commercial reserves of the pool to which they relate.
E&E assets are assessed for impairment when facts and circumstances suggest that their carrying amount may exceed its recoverable amount. Such indicators include the point at which a determination is made as to whether or not commercial reserves exist. Where the E&E assets concerned fall within the scope of an established full cost pool, the E&E assets are tested for impairment together with all development and production assets associated with that cost pool, as a single cash-generating unit. The aggregate carrying value is compared against the expected recoverable amount of the pool, generally by reference to the present value of the future net cash flows expected to be derived from production of commercial reserves. These ceiling test values are calculated on the basis of expected future product prices or, if applicable at prices specified in a sale contract, and discounted by 10% per annum. Where the E&E assets to be tested fall outside the scope of any established cost pool, there will generally be no commercial reserves and the E&E assets concerned will generally be written off in full.
Any material impairment loss is recognised in the income statement and separately disclosed.
Oil and gas assets: development and production
Development and production assets are accumulated on a field-by-field basis and represent the cost of developing the commercial reserves discovered and bringing them into production, together with the E&E expenditures incurred in finding commercial reserves transferred from intangible E&E assets as outlined above.
The net book values of producing assets are depreciated on a field -by-field basis using the unit of production method based on entitlement to provide by reference to the ratio of production in the period to the related commercial reserves of the field, taking into account estimated future development expenditures necessary to bring those reserves into production.
An impairment test is performed whenever events and circumstances arising during the development or production phase indicate that the carrying value of a development or production phase assets may exceed its recoverable amount. The aggregate carrying value is compared against the expected recoverable amount of the cash-generating unit, generally by reference to the present value of the future net cash flows expected to be derived from production of commercial reserves. These ceiling test values are calculated on the basis of expected future product prices or, if applicable at prices specified in a sale contract, and discounted by 10% per annum. The cash-generating unit applied for impairment test purposes is generally the field, except that a number of field interests may be grouped as a single cash-generating unit where the cash flows of each field are interdependent.
Decommissioning
Where a material liability for the removal of production facilities and site restoration at the end of the productive life of a field exists, a provision for decommissioning is recognised. The amount recognised is the present value of estimated future expenditure determined in accordance with local conditions and requirements. A tangible fixed asset of an amount equivalent to the provision is also created and depreciated on a unit of the production basis. Changes in estimates are recognised prospectively, with corresponding adjustments to the provision and the associated fixed assets.
These new accounting policies replace the accounting policies, "Oil and gas projects - tangible and intangible assets", "Oil and gas reserves", "Production assets - tangible assets" and "Non-production assets - intangible assets" as detailed on pages 36 and 37 of the Annual Report and Accounts 2006.
Business combinations
The Group has chosen to adopt IFRS 3 prospectively from the date of transition and not restate historic business combinations from before this date. Business combinations from the date of transition are accounted for under IFRS 3 using the purchase method.
Notes forming part of the interim report for the six months ended 30 June 2007
3. Administrative expenses - share incentives
Due to the material contribution of share based charges to the Group'sadministrative expenses the Company has, in order to show a true and fair view,disclosed the full impact of these charges on the face of the consolidatedincome statement. This has resulted in a reclassification of administrativeexpenses in the prior periods, as only the IFRS 2 charge was previouslyseparately disclosed. 6 months to 6 months to Year to 31 30 June 30 June December 2007 2006 2006 As restated As restated ‚£'000 ‚£'000 ‚£'000 Share based payments - National 537 347 212Insurance Share based payments - IFRS 2 249 40 311 786 387 5234. Other operating income 6 months to 6 months to Year to 31 30 June 30 June December 2007 2006 2006 ‚£'000 ‚£'000 ‚£'000 Project operator fees 60 50 80 Fees for other services 18 21 63 Strategic alliance fee 9,536 - - 9,614 71 1435. Profit / (loss) per shareThe basic and diluted profit or loss per share is calculated on the profit orloss attributable to equity shareholders of the parent and on ordinary sharesbeing the weighted average number of ordinary shares on issue during theperiod. 6 months to 6 months to Year to 31 30 June 30 June December 2007 2006 2006 As restated As restated Profit / (loss) per share - basic ‚£'000 ‚£'000 ‚£'000 Profit / (loss) attributable to equity shareholders of the parent 7,414 (961) (1,704) Weighted average number of ordinary 70,308,210 57,863,960 63,948,884shares at period end 10.54p (1.66p) (2.66p)
Notes forming part of the interim report for the six months ended 30 June 2007
5. Profit / (loss) per share (continued)
The diluted profit or loss per share is calculated on the profit or loss attributable to equity shareholders of the parent and on ordinary shares being the weighted average number of ordinary shares on issue, plus potential ordinary shares, during the period.
6 months 6 months Year to 31 to 30 June to 30 June December 2007 2006 2006 As As restated restated Profit / (loss) per share - diluted ‚£'000 ‚£'000 ‚£'000 Profit / (loss) attributable to equity shareholders of the parent 7,414 (961) (1,704)
Weighted average number of ordinary 76,817,351 57,863,960 63,948,884 shares plus potential ordinary shares at
period end 9.65p (1.66p) (2.66p)
6. Property, plant and equipment
6 months to 6 months to Year to 31 30 June 30 June December 2007 2006 2006 As restated As restated ‚£'000 ‚£'000 ‚£'000 Oil and gas assets 7,102 1,120 1,987 Computer and office equipment 139 73 159 7,241 1,193 2,1467. Payment in advance
The ‚£13,755,000 included in current liabilities represents the cash consideration received during May 2007 by Northern Petroleum Nederland B.V. ("NPN") from Dyas B.V. ("Dyas") in respect of the partial sale of some of NPN's assets to Dyas. These asset transactions are expected to complete in the second half of 2007 with the final transfer of the licences, at which point the profit on the sale of these assets will crystallise.
8. Transition to IFRS
The consolidated financial information for the six months ended 30 June 2006 and the year ended 31 December 2006 have been prepared in accordance with International Financial Reporting Standards (IFRS) for the first time.
The Group's transition date to IFRS is 1 January 2006. The rules for first-time adoption of IFRS are set out in IFRS 1 `First time adoption of international reporting standards'. In preparing the IFRS financial information, these transition rules have been applied to the amounts reported previously under generally accepted accounting principles in the United Kingdom (`UK GAAP'). IFRS 1 generally requires full retrospective application of the Standards and Interpretations in force at the first reporting date. However, IFRS 1 allows certain exemptions in the application of particular Standards to prior periods in order to assist companies with the transition process.
The only exemption applied by the Group on first time adoption of IFRS relates to cumulative translation differences (under IAS 21). This exemption allows cumulative translation differences for all foreign operations to be deemed zero at the date of transition to IFRS.
Notes forming part of the interim report for the six months ended 30 June 2007
8. Transition to IFRS (Continued)
Explanations of differences between UK GAAP and IFRS giving rise to adjustments in the reconciliations:
In accordance with International Accounting Standard (IAS) 16: "Accounting for Property, Plant and Equipment" and IAS 38: "Intangible Assets" oil and gas exploration & evaluation application costs incurred prior to having obtained the legal rights to explore an area, were previously capitalised within assets on the balance sheets. However in accordance with IFRS 6 these previously capitalised pre licence costs have been written back to the income statement through cost of sales.
Adjustments to the cash flow statement
The transition from UK GAAP to IFRS has no effect upon the figures reported in the cash flows generated by the Group. The IFRS cash flow statement is presented in a different format from that required under UK GAAP with cash flows split into three categories of activities - operating activities, investing activities and financing activities.
Notes forming part of the interim report for the six months ended 30 June 2007
8. Transition to IFRS (Continued)
Consolidated financial information for the year ended 31 December 2006
Consolidated income statement UK GAAP* IFRS 6 IFRS 2006 2006 ‚£'000 ‚£'000 ‚£'000 Revenue 227 - 227 Production costs (44) - (44) Depreciation, depletion and (75) (50) (125)amortisation Cost of sales (119) (50) (169) Gross profit 108 (50) 58 Administrative expenses (1,732) - (1,732) Administrative expenses -share (523) - (523)incentives Other operating income 143 - 143 Loss from operations (2,004) (50) (2,054) Share of operating loss in associates (110) - (110) Total loss from operations: Group and share associates (2,114) (50) (2,164) Finance income 415 - 415 Share of disposal of subsidiary and 45 - 45associates Loss before taxation (1,654) (50) (1,704) Tax expense - - - Net loss for the financial period (1,654) (50) (1,704) Basic and diluted loss per share on (2.59p) (2.66p)loss for the period
All amounts are attributable to equity shareholders of the parent.
\* The UK GAAP column represents the numbers previously reported; however the presentation has been amended to comply with IAS 1.
Notes forming part of the interim report for the six months ended 30 June 2007
8. Transition to IFRS (Continued)
Consolidated financial information for the year ended 31 December 2006
Consolidated balance sheet UK GAAP* IAS 21/ IFRS 2006 IFRS 6 2006 ‚£'000 ‚£'000 ‚£'000 Non-current assets Exploration and evaluation assets 6,897 (254) 6,643 Property, plant and equipment 2,146 - 2,146 Investments in joint ventures: Share of gross assets of joint ventures 14 - 14 Share of gross liabilities of joint (14) - (14)ventures - - - Share of net assets of associates 130 - 130 9,173 (254) 8,919 Current assets Inventories 27 - 27 Trade and other receivables 2,568 - 2,568 Cash and cash equivalents 15,954 - 15,954 18,549 - 18,549 Total assets 27,722 (254) 27,468 Non-current liabilities Provision for liabilities and charges 230 - 230 Current liabilities Trade and other payables 3,381 - 3,381 Total liabilities 3,611 - 3,611 Net assets 24,111 (254) 23,857 Capital and reserves Share capital 3,511 - 3,511 Share premium account 18,529 - 18,529 Special reserve (distributable) 3,599 - 3,599 Special reserve (undistributable) 122 - 122 Share incentive plan reserve 295 - 295 Foreign currency translation reserve - 42 42 Retained earnings (1,945) (296) (2,241) Total equity 24,111 (254) 23,857
All amounts are attributable to equity shareholders of the parent.
\* The UK GAAP column represents the numbers previously reported; however the presentation has been amended to comply with IAS 1.
Notes forming part of the interim report for the six months ended 30 June 2007
8. Transition to IFRS (Continued)
Consolidated financial information for the year ended 31 December 2006
Consolidated cash flow statement UK GAAP* IFRS 6 IFRS 2006 2006 ‚£'000 ‚£'000 ‚£'000 Net cash outflow from operating (361) - (361)activities Cash flows from investing activities Interest received 415 - 415 Purchase of property, plant and (1,548) - (1,548)equipment Expenditure on exploration and (3,751) - (3,751)evaluation assets Net cash outflows used in investing (4,884) - (4,884)activities Cash flows from financing activities Issue of ordinary shares (net of 19,302 - 19,302expenses) Net cash inflow from financing 19,302 - 19,302activities Net increase in cash and cash 14,057 - 14,057equivalents Cash and cash equivalents at start of 1,904 - 1,904period Effect of exchange rate changes on cash (7) - (7)and cash equivalents Cash and cash equivalents at 31 15,954 - 15,954December Reconciliation of operating loss to net cash flow from operating activities: Operating loss (2,004) (50) (2,054) Depreciation, depletion and 82 50 132amortisation Depreciation - non oil and gas tangible 41 - 41assets Foreign exchange differences 47 - 47 Increase in short term loans (750) - (750)receivables Increase in trade and other receivables (742) - (742) Increase in trade and other payables 2,654 - 2,654 Share based payments 311 - 311 Net cash flow from operating activities (361) - (361)
\* The UK GAAP column represents the numbers previously reported; however the presentation has been amended to comply with IAS 1.
Notes forming part of the interim report for the six months ended 30 June 2007
8. Transition to IFRS (Continued)
Consolidated financial information for the period 30 June 2006
Consolidated income statement UK GAAP* IFRS 6 IFRS 2006 2006 ‚£'000 ‚£'000 ‚£'000 Revenue 105 - 105 Production costs (27) - (27) Depreciation, depletion and amortisation (10) (20) (30) Cost of sales (37) (20) (57) Gross profit 68 (20) 48 Administrative expenses (755) - (755)
Administrative expenses - share incentives (387) - (387)
Other operating income 71 - 71 Loss from operations (1,003) (20) (1,023) Share of operating loss in associates (73) - (73) Total loss from operations: Group and share associates (1,076) (20) (1,096) Finance income 91 - 91 Share of disposal of subsidiary and 44 - 44associates Loss before taxation (941) (20) (961) Tax expense - - - Net loss for the financial period (941) (20) (961) Basic and diluted loss per share on loss for (1.63p) (1.66p)the period
All amounts are attributable to equity shareholders of the parent.
\* The UK GAAP column represents the numbers previously reported; however the presentation has been amended to comply with IAS 1.
Notes forming part of the interim report for the six months ended 30 June 2007
8. Transition to IFRS (Continued)
Consolidated financial information for the period 30 June 2006
Consolidated balance sheet UK GAAP* Opening UK GAAP IAS 21/ IFRS
2006 IFRS 6 2006 Adjustment 2006 As 2006 (ii) restated (i) ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Non-current assets Exploration and evaluation 3,494 - 3,494 (224) 3,270assets Property, plant and 1,193 - 1,193 - 1,193equipment Investments in joint ventures: Share of gross assets of 11 - 11 - 11joint ventures Share of gross liabilities (11) - (11) - (11)of joint ventures - - - - - Share of net assets of 164 - 164 - 164associates 4,851 4,851 (224) 4,627 Current assets Inventories 27 - 27 - 27
Trade and other receivables 873 - 873 - 873
Cash and cash equivalents 20,320 - 20,320 - 20,320 21,220 - 21,220 - 21,220 Total assets 26,071 - 26,071 (224) 25,847 Non-current liabilities Provision for liabilities 233 - 233 - 233and charges Current liabilities Trade and other payables 1,567 - 1,567 - 1,567 Total liabilities 1,800 - 1,800 - 1,800 Net assets 24,271 - 24,271 (224) 24,047 Capital and reserves Share capital 3,481 - 3,481 - 3,481 Share premium account 18,307 - 18,307 - 18,307 Special reserve 3,591 - 3,591 - 3,591(distributable) Special reserve 130 - 130 - 130(undistributable)
Share incentive plan reserve 106 20 126 - 126
Foreign currency translation - - - 6 6reserve Retained earnings (1,344) (20) (1,364) (230) (1,594) Total equity 24,271 - 24,271 (224) 24,047
All amounts are attributable to equity shareholders of the parent.
i) As stated in the Interim Report 2006.
ii) Adjustment for the recalculation of the effect of FRS 20 (IFRS2) share based payments to the 2006 opening balance sheet made in the Annual Report 2006.
\* The UK GAAP column represents the numbers previously reported; however the presentation has been amended to comply with IAS 1.
Notes forming part of the interim report for the six months ended 30 June 2007
8. Transition to IFRS (Continued)
Consolidated financial information for the period 30 June 2006
Consolidated cash flow statement UK GAAP* IFRS 6 IFRS 2006 2006 ‚£'000 ‚£'000 ‚£'000 Net cash outflow from operating (98) - (98)activities Cash flows from investing activities Interest received 91 - 91 Purchase of property, plant and (341) (341)equipment Expenditure on exploration and (292) - (292)evaluation assets Net cash outflows used in investing (542) - (542)activities Cash flows from financing activities Issue of ordinary shares (net of 19,050 - 19,050expenses) Net cash inflow from financing 19,050 - 19,050activities Net increase in cash and cash 18,410 - 18,410equivalents Cash and cash equivalents at start of 1,904 - 1,904period Effect of exchange rate changes on cash 6 - 6and cash equivalents Cash and cash equivalents at end of 20,320 - 20,320period Reconciliation of operating loss to net cash flow from operating activities: Operating loss (1,003) (20) (1,023) Depreciation, depletion and 10 20 30amortisation Depreciation - non oil and gas tangible 15 - 15assets Fair value of share incentives 40 - 40 Decrease in trade and other receivables 287 - 287 Increase in trade and other payables 553 - 553 Net cash flow from operating activities (98) - (98)
\* The UK GAAP column represents the numbers previously reported; however the presentation has been amended to comply with IAS 1.
Notes forming part of the interim report for the six months ended 30 June 2007
8. Transition to IFRS (Continued)
Consolidated financial information as at 1 January 2006
Consolidated balance sheet UK GAAP* IFRS 6 IFRS 2006 2006 ‚£'000 ‚£'000 ‚£'000 Non-current assets Exploration and evaluation assets 3,208 (204) 3,004 Property, plant and equipment 663 - 663 Investments in joint ventures: Share of gross assets of joint ventures 10 - 10 Share of gross liabilities of joint (10) - (10)ventures - - - Share of net assets of associates 195 - 195 4,066 (204) 3,862 Current assets Inventory 27 - 27 Trade and other receivables 1,076 - 1,076 Cash and cash equivalents 1,904 - 1,904 3,007 3,007 Total assets 7,073 (204) 6,869 Non-current liabilities Provision for liabilities and charges 27 - 27 Current liabilities Trade and other payables 930 - 930 Total liabilities 957 - 957 Net assets 6,116 (204) 5,912 Capital and reserves Share capital 2,697 - 2,697 Share premium account 41 - 41 Special reserve (distibutable) 3,574 - 3,574 Special reserve (undistibutable) 147 - 147 Share incentive plan reserve 87 - 87 Retained earnings (430) (204) (634) Total equity 6,116 (204) 5,912
All amounts are attributable to equity shareholders of the parent.
\* The UK GAAP column represents the numbers previously reported, however the presentation has been amended to comply with IAS 1.
Notes forming part of the interim report for the six months ended 30 June 2007
9. Approval by Directors
The interim report for the six months to 30 June 2007 was approved by the Directors on 26 September 2007.
10. Availability of Interim Report
The interim report will immediately be available on the Company's website ( www.northpet.com), and copies will be sent shortly to registered shareholders, with further copies available on request from the Company's registered office.
NORTHERN PETROLEUM PLC