Cabot Energy Regulatory News (CAB)

29 Sep 2005 11:29

Immediate release: 29 September 2005 Northern Petroleum Plc ("Northern" or the "Company") Interim Results for the Six Months to 30 June 2005 Highlights * A significant new sphere of operations being established in the Netherlands with planned short term oil and gas field developments for 3200-5000 barrels of oil per day and 50Mw of electricity, 30% net to Northern. * On going exploration and appraisal drilling programme in South of England * Achieving of a substantial exploration licence position in Italy * A strong cash position and tight expenditure control maintained Chairman's StatementI am delighted with the establishment of the new sphere of operations in theNetherlands even if this anticipates the successful outcome of our ProductionLicence application in order to develop the Papekop gas and oil discovery. Thiswill add to our position under the joint venture agreements with the Shell/ExxonMobil subsidiary - Nederlandse Aardolie Maatschappij ("NAM").We will now pursue this opportunity to bring a total of six oil and gasdiscoveries into production during the period of late 2006 and into 2007. Weanticipate achieving production levels of 3200-5000 barrels of oil per day andon site generation of up to 50Mw. of electricity from the gas, 30% of which isnet to Northern, which assumes that the Minister of Economic Affairs elects todesignate Energie Beheer Nederland B.V. ("EBN"), a State owned company, as a40% participant in the licences to which it is not currently party to in returnfor a pro-rata share of past exploration costs and a pro-rata share of allfuture costs of the joint ventures. Our share of this will greatly expand thecompany's cash flow and is anticipated to provide sufficient surplus funds tosustain our ongoing exploration programme in the future.The venture in the Netherlands will become our key project in the immediatefuture and will make a major call upon the Company's management and technicalstaff. We have therefore decided to reduce our commitments in Spain by theexchange with Ascent Resources Plc of our 50% holding in three explorationlicences for a 2.5% overriding royalty on those interests. This will avoid thecommitment of substantial management and skilled technical resources and allowus to deploy them on less risky projects with greater perceived potential. Ourproject to re-perforate the wells in the Ayoluengo field progresses on the backof a 64% increase in the current local price paid for our product as againstthat received at the end of 2004, a major factor that enables me to report anincrease of ‚£72,000 in gross profits and a decrease of ‚£41,000 in operatinglosses for the six month period despite increased activity levels and theconsequential increase in personnel. The overall loss for the period is ‚£233,000 as against ‚£275,000 for the comparable period last year. These resultsonce again demonstrate the Group's tight control of its cost base and theefficiency of its staff.In Italy our position has been expanded to twenty one licences and applicationscovering an area in excess of 11,000 km‚². The applications now include two oildiscoveries in the southern Adriatic and one gas discovery off the CalabrianCoast. We have also entered into discussions with substantial potential newpartners regarding our licences in the western Po Valley, Nibbia and Gattinara,and licences offshore south west of Sicily with a view to early drilling ofthose licenses at little or no expense to the company.In the South of England our two well Wessex Basin drilling campaign on the Isleof Wight is in progress. The first well, Sandhills-2, drilled to appraise the1982 logged oil discovery has disappointed with the realisation that the oil ispredominantly bio-degraded. Some small comfort can be taken in that, at onetime, a substantial accumulation of mobile oil was there and this has somepositive implications for both the area to the east and the area to the westwhere we are currently drilling Bouldnor Copse-1, both as a further Jurassictest of the same Great Oolite Reservoir tested at Sandhills and the largeTriassic prospect estimated by independent consultants to be of the potentialof 300 million barrels of oil in place.Our programme for the Weald Basin is planned for 2006 and our forecast isclearly not diminished by this year's drilling campaign. We shall approach thework of obtaining planning consent with the benefit of our experiences on theIsle of Wight and trust that we will satisfactorily present ourselves as asuitable new neighbour in the communities concerned. I anticipate that drillingthose prospects will be successful and soon add to our promising cash flowposition for 2007 onwards.I can also look forward with you to our first well in the Guyane offshoreconcession of which Hardman Resources is the operator. Our 1.25 % netbeneficial interest may seem small, but with the potential to drill significantnumber of very substantial sized prospects of which several are in excess ofone billion barrel potential, I see reason for cautious excitement. HardmanResources has announced their intent to drill the first prospect in the middleof 2006 following the 3-D seismic survey to be conducted in October 2005.I wish to thank Jerry White for his services to the company as Finance Directorduring our sustained period of growth since 1999. He continues as anon-Executive Director and Chairman of the Audit Committee. I also welcomeChris Foss stepping into the position of Finance Director following a period ofcommendable service as Group Financial Controller. This has been and continuesto be a period of expansion both in the Company's business and the Company'sskill base.R LathamChairman28 September 2005For further information please contact,Derek Musgrove, Managing DirectorChris Foss, Finance DirectorNorthern Petroleum PlcTel. 020 7743 6080Chris Roberts/Ben SimonsHansard CommunicationsTel. 020 7245 1100Notes to EditorsNorthern Petroleum Plc is an oil and gas exploration, development andproduction company focused on the European Union and nearby areas. It is quotedon the AIM Market of the London Stock Exchange.The Company seeks to obtain significant licence positions to which it can addvalue at reasonable risk utilising new ideas together with new drilling,seismic, completion and computer technologies and where it is believed thateconomic oil and gas production can be established. Efforts are concentrated ina few areas.The Company is a recognised Operator of both onshore and offshore projectsincluding a producing oilfield and boasts a management and technical team ofthe highest quality.Consolidated Profit and Loss AccountFor the six month period Ended 30 June 2005 6 month 6 month period ended period ended Year ended 30 June 30 June 31 December 2005 2004 2004 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 Group turnover 273 230 468 Group cost of sales Production costs (188) (170) (332) Exploration costs (1) (42) (36) Depreciation, depletion and (11) (17) (88)amortisation (200) (229) (456) Gross profit 73 1 12 Administrative expenses (464) (375) (786) Other operating income 101 43 108 Group operating loss (290) (331) (666) Share of operating (loss)/profit in (37) - 3associates Operating loss for the group before (327) (331) (663)interest and other income Interest receivable 78 59 161 Profit on sale of fixed asset 22 - 16investments Loss on ordinary activities before (227) (272) (486)taxation Tax on loss on ordinary activities (6) (3) (5) Retained loss for the period (233) (275) (491) Basic and diluted loss per share (0.43)p (0.58)p (0.98)p 6 month 6 month period ended period ended Year ended 30 June 30 June 31 December 2005 2004 2004 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 Loss for the period (233) (275) (491) Exchange differences on (20) (17) (3)retranslation of net assets of subsidiary undertakings Total recognised gains and (253) (292) (494)losses Consolidated Statement of Total Recognised Gains and LossesFor the six month period ended 30 June 2005 30 June 30 June 31 December 2005 2004 2004 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 Fixed assets Intangible assets 1,301 899 625 Negative goodwill - (5) - Tangible assets 533 303 566 Investments in joint ventures: Share of gross assets of joint 5 - 3ventures Share of gross liabilities of (5) - (3)joint ventures - - - Share of net assets of 238 - 249associates Total fixed assets 2,072 1,197 1,440 Current assets Stocks 131 130 137 Debtors 507 457 667 Cash at bank and in hand 4,330 5,546 5,140 4,968 6,133 5,944 Creditors: Amounts falling due within one 705 589 810year Net current assets 4,263 5,544 5,134 Creditors: amounts falling due 51 51 53after more than one year Provision for liabilities and 106 106 109charges Total assets less liabilities 6,178 6,584 6,412 Minority shareholders' interest - 59 -- equity 6,178 6,525 6,412 Capital and reserves Called up share capital 7,127 7,099 7,119 Share premium account 9,343 9,263 9,332 Profit and loss account (10,292) (9,837) (10,039) Shareholders' funds - equity 6,178 6,525 6,412Consolidated Balance SheetAs at 30 June 2005 6 month 6 month period ended period ended Year ended 30 June 30 June 31 December 2005 2004 2004 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 Net cash outflow from operating (225) (315) (573)activities Returns on investments and servicing of finance Interest received 78 59 161 Taxation Corporation tax paid (3) (3) (7) Capital expenditure and financial (668) (343) (462)investments Management of liquid resources Sale of current asset investments - 226 - Cash outflow before financing (818) (376) (881) Financing Issue of ordinary shares for cash (net 18 2,993 3,082of expenses) (Decrease)/increase in cash for the (800) 2,617 2,201period Reconciliation of operating loss to net cash flow from operating activities: Operating loss (290) (331) (666) Depreciation, depletion and 12 55 124amortisation Amortisation of negative goodwill - (5) (10) Depreciation - non oil and gas 5 5 10tangible assets Decrease in stocks 6 9 2 Decrease/(increase) in operating 160 8 (205)debtors and prepayments (Decrease)/increase in operating (109) (55) 168creditors and accruals Exchange adjustments (9) (1) 4 65 16 93 Net cash outflow from operating 225 (315) (573)activities Consolidated Statement of Cash FlowsFor the six month period 30 June 2005Reconciliation of net cash flow to movement in net funds:(Decrease)/increase in cash for (800) 2,617 2,201the period Exchange adjustments (10) (16) (6) Net funds at start of period 5,140 2,945 2,945 Net funds at end of period 4,330 5,546 5,140Notes to the AccountsFor the six month period 30 June 20051. The results for the period are all derived from continuing activities.2. For oil and gas projects, the full cost accounting policy has been adopted,whereby all costs are accumulated in cost pools and are then written off to theextent that they are not supported by underlying oil and gas reserves, unlessthe expenditure relates to an area where it is too early to make such adecision. Expenditure in the latter category has been included on the balancesheet under intangible assets.3. During the second half of 2005 the Company will perform a final fair valuereview of its acquisition during October 2004 of the 30% interest in NorthernPetroleum (UK) Limited that it did not already own, with any requiredadjustments being made in the 2005 annual accounts.4. The calculation of the basic and diluted loss per share has been based onthe loss after taxation for the period and the average number of ordinaryshares in issue throughout the period after adjusting for the ordinary sharesissued followed the exercise of warrants in June 2005 and for the one for fiveconsolidation of the Company's ordinary shares that took effect from 8 August2005.5. The unaudited results have been prepared on the basis of the accountingpolicies adopted in the annual accounts for the year ended 31 December 2004.6. The interim report is unaudited and does not constitute Statutory Accountsas defined in Section 240 of the Companies Act 1985. A copy of the group's 2004Statutory Accounts has been filed with the Registrar of Companies.7. The interim report for the six months to 30 June 2005 was approved by theDirectors on28 September 2005.ENDNORTHERN PETROLEUM PLC