Echo Energy Regulatory News (ECHO)

15 Jun 2006 07:09

Independent Resources PLC15 June 2006 Independent Resources plc INTERIM RESULTS FOR THE PERIOD ENDED 31 MARCH 2006 Independent Resources plc ("Independent Resources" or the "Group"), theinternational gas storage and development company with extensive operations inItaly and Tunisia, today announces its interim results for the period fromincorporation on 16 June 2005 to 31 March 2006. The Group is reporting itsinterim results under International Financial Reporting Standards (IFRS). FINANCIAL AND OPERATIONAL HIGHLIGHTS • £5.06 million (pre-expenses) raised on admission to AIM in December 2005• Significant progress made on gas storage and exploration projects• Permitting authorities' preliminary feedback on the Rivara gas storage project EIA now integrated, formal submission imminent• Approaches from several potential Rivara partners• Re-entry of Sidi Toui-3 appraisal well on schedule for third quarter• First well on Fiume Bruna CBM permit to be drilled in third quarter CHAIRMAN'S STATEMENT This is our first reporting period since Independent Resources was incorporatedin June 2005 and includes our successful admission to AIM in December. Duringthis time, the Board believes that the Group has made encouraging progress inevaluating and developing its promising portfolio of gas storage and upstreamoil and gas assets. We have been prudent with our expenditures, and have set and achieved specificmilestones for all our activities. We maintain ample liquidity with over£5 million in cash and equivalents. This is being applied to accomplishthe work programmes we described to the investment community in our prospectus. Independent Resources provided an operational update to the investment communityat the end of March this year, and it is fair to say that our activities inrelation to Rivara, Fiume Bruna and Ksar Hadada have continued to gathermomentum since then. Rivara UGS The Rivara underground gas storage ("UGS") project in northern Italy has thepotential to become a major, high-performance storage facility located close toItaly's physical gas balancing point and alongside the gas "motorway" thattransports Europe's long-term gas supplies from North Africa. Last winter, Italyexperienced its first full-blown gas supply crisis which was due primarily tothe shortage of storage and deliverability capacity. The Board is confident thatthe development of Rivara will prove to be extremely profitable, not only inmitigating these physical constraints but also in providing a long-termstrategic platform for national, and eventually intercontinental, gas pricingarbitrage. As evidence of its potential, Rivara has recently been the subject of a specificpartnership and farm-in proposal from one of Europe's leading gas utilities, aswell as several other unsolicited expressions of interest, the details of whichare subject to confidentiality obligations. We will be carefully evaluating allsuch approaches to determine whether it is in our shareholders' best intereststo pursue them further, at this early stage in the development of what, webelieve, will be a unique and valuable resource. In parallel, Independent Resources' gas storage subsidiary, IGM, has recentlyexecuted a Memorandum of Understanding ("MoU") with Bologna-based Hera SpA(www.gruppohera.it/english), the principal multi-utility within the EmiliaRomagna region. As geographic neighbours with overlapping business objectivesand a common regulatory regime, both parties recognise that there are potentialbenefits to be gained through co-operation. While no binding obligations areentailed in the MoU, it is hoped that this arrangement will generatemutually-advantageous business opportunities for both companies. The Board also believes that this regional co-operation will enhance theplanning process for Rivara. The Environmental Impact Assessment ("EIA"), onwhich the final planning consent is granted, is about to be formally submitted,and we are already incorporating detailed improvements based on constructivefeedback from national, regional and local administrations. As previouslyhighlighted, the Italian government and regulatory authorities are encouragingIndependent Resources to advance its plans for Rivara as quickly as possible inview of the country's increasingly severe gas supply constraints. Ksar Hadada, Tunisia Plans to re-enter the Sidi Toui-3 well remain on target for Q3 this year.Preparations for this are progressing on all fronts, with an emphasis onsecuring long lead-time items such as tubulars. The existing well-head andwell-site have been inspected and negotiations to secure a drilling rig areunderway, along with limited reprocessing and interpretation of the seismic andwell data. The Ksar Hadada permit, operated by a subsidiary of Petroceltic Internationalplc, covers more than 7,000 sq km in southeast Tunisia, and contains a number ofother promising leads besides Sidi Toui. Independent Resources holds a 40%interest in the permit. Fiume Bruna CBM project Bids have been received for drilling the first well on our 100%-held Fiume Brunacoal bed methane ("CBM") permit, and these are now being assessed prior toselecting a drilling contractor. The bids received are consistent with ourrevised budgets, and the current expected capital outlay required to bring FiumeBruna into production, which is significantly lower than envisaged at the timeof our admission to AIM, has led the Board to revise upwards its conservativevaluations of the project. The initial well will be classified as a stratigraphic well and is expected tospud in the third quarter of this year. Drilling results, which will includeflow rates, produced water composition and an accurate indication of the methanecontent per tonne of coal, should be available soon thereafter. This drillinginformation will be invaluable in planning the next phase of appraisal for thedevelopment, which is likely to be acquisition and processing of additionalseismic data. This will be the first-ever CBM well in Italy. Arrangements for determining thegas content and composition have been put in place at an on-site facility and inthe laboratories of INGV (Italy's National Institute of Geophysics andVulcanology), under the guidance of CBM specialists, Questa EngineeringCorporation, of Colorado. The Group intends to submit a formal environmental impact screening submissionrelating to the Fiume Bruna project within the next few weeks. However, neithersubmission nor approval is required for drilling this initial well or acquiringadditional seismic data. The Board is greatly encouraged by the results of our activities to date, and Ilook forward to keeping you informed of our continuing progress in the future. Grayson NashExecutive ChairmanIndependent Resources plc For further information contact: Independent Resources plcGrayson Nash, Executive Chairman 00 39 02 3655 960Steve Staley, Managing Director 01332 865 253 07771 838 753 First City Financial Public RelationsIan Foster 07739 185050 Deloitte Corporate FinanceJonathan Hinton 020 7936 3000David Smith 020 7936 3000 CONSOLIDATED INCOME STATEMENT Period ended 31 March 2006 31-Mar 2006 £Continuing operationsRevenue -Cost of sales - ________Gross profit - Distribution costs - Administrative expenses (345,180) ________ (345,180) Other operating income - ________Operating loss (345,180) Exceptional items - ________ (345,180) Net financial income 85,304 ________Loss on ordinary activities before taxation (259,876) Tax - ________Loss for the period attributable to equity holders of the parent (259,876) ======= Basic earnings per share (2)p Diluted earnings per share (2)p CONSOLIDATED BALANCE SHEET Period ended 31 March 2006 31-Mar 2006 £Non-current assetsGoodwill 519,756Other intangible assets 486,131Property, plant and equipment 64,647 ________ 1,070,534 Current assetsTrade and other receivables 81,763Cash and cash equivalents 5,422,194 ________ 5,503,957 Current liabilitiesTrade and other payables (138,781) ________Net current assets 5,365,176 ________Net assets 6,435,710 =======EquityShare capital 334,333Share premium account 5,843,828Shares to be issued 517,425Retained earnings (259,876) ________ 6,435,710 Total equity attributable to equity holders of the parent 6,435,710 ======= CONSOLIDATED CASH FLOW Period ended 31 March 2006 31-Mar 2006 £Cash flows from operating activitiesLoss before taxation (259,876)Adjustments for:Depreciation of property, plant and equipment 2,666Financial income (85,304) ________ (342,514) Increase in trade and other receivables (66,329)Increase in trade and other payables 127,253 ________Net cash used in operating activities (281,590) Cash flows from investing activities Acquisition of subsidiaries net of cash acquired (6,996)Payments to acquire Permits (278,041)Work carried out on Permits (208,090)Purchase of property, plant and equipment (66,554)Interest received 85,304 ________Net cash used in investing activities (474,377) Cash flows from financing activitiesIssue of share capital 7,266,470Costs associated with Share issues (1,088,309) ________Net cash from financing activities 6,178,161 ________Net decrease in cash and cash equivalents 5,422,194 Cash and cash equivalents at beginning of the period - ________Cash and cash equivalents at end of the period 5,422,194 ======= NOTES TO THE INTERIM ACCOUNTS FOR THE PERIOD ENDED 31 MARCH 2006 1 Basis of preparation The interim financial information for the period from incorporation on 16 June2005 to 31 March 2006 has been prepared in accordance with InternationalFinancial Reporting Standards and International Accounting Standards and underthe historical cost convention in accordance with the Group's accountingpolicies which will be published in the Annual Report for the period ended 30September 2006. The interim financial information complies with IAS 34. As the interim financial information is for the period since incorporation thereare no comparative figures to be disclosed. The financial information set out above does not constitute the Company'sstatutory accounts as defined by section 240 of the Companies Act 1985 and hasbeen neither audited nor reviewed. 2 Taxation There is no current tax charge for the period. The accounts do not include adeferred tax asset in respect of carry forward of unused tax losses as thedirectors are unable to assess that there will be probable future taxableprofits available against which the unused tax losses can be utilised. 3 Valuation of share options Management has concluded that the fair value of the options at the date of grantwas not material. 4 The Purchase of Independent Gas Management srl As stated in the Admission document in December 2005, part of the considerationfor the acquisition of Independent Gas Management was deferred and dependent onthe progress of the share price. In view of the lack of volatility and the largegap between current share prices and the trigger price for additionalconsideration the Directors do not feel it is necessary at this early stage toprovide for any further consideration in the accounts. 5 Intangible assets During the period, £208,090 of company expenditure was capitalised to projectsthat the company is actively pursuing and for which the licences or permits havebeen approved. 6 Earnings per share The loss per ordinary share is calculated by reference to the loss attributableto ordinary shareholders divided by the weighted average number of shares inissue during the period as follows: 31-Mar 2006 £ Loss for the period (259,876) Basic weighted average number of shares 15,409,203Basic loss per share (2) p Diluted weighted average number of shares 15,409,203Diluted loss per share (2) p 7 Statement of changes in equity 31-Mar 2006 £ Equity shares issued in the period 7,266,470Less costs associated with share issue taken to share premium account (1,088,309)Less loss for the period attributable to equity holders of the parent (259,876) ________Total equity attributable to equity holders of the parent 5,918,285 ======= 8 Acquisitions On 19 July 2005 the company acquired the entire issued share capital ofIndependent Energy Solutions srl and Independent Gas Management srl. Acquisitions of subsidiaries IES IGM Total £ £ £ Trade and other receivables 8,883 6,552 15,435Trade and other payables (9,011) (2,518) (11,529)Cash and cash equivalents 528 2,745 3,273 ________ ________ ________ 400 6,779 7,179Consideration:Cash 10,269 - 10,269Equity shares to be issued in future periods - 517,425 517,425 ________ ________ ________Total consideration 10,269 517,425 527,694 ________ ________ ________Goodwill arising on acquisition 9,869 510,646 520,515 ======= ======= ======= Equity shares to be issued in connection with the purchase of Independent GasManagement srl are treated as a non current payable until the shares are issued.The consideration for this purchase was a total of 3,449,500 ordinary shares ofwhich 25% are issuable three years after the date of admission to AIM with theremainder only to be issued upon certain contingent events. Registered officeIndependent Resources plcThe Hollow, Penn Lane, Melbourne, Derbyshire DE73 8EPTelephone: +44 (0)1332 865253Fax: +44 (0)1332 865111Email: mailbox@ir-plc.com Commercial officeVia Nirone 8, 20123 Milan, ItalyTelephone: +39 (02) 3655 5960Fax: +39 (02) 9998 8778Email: mailbox@ir-plc.com Technical officeViale Liegi 10, 00198 Roma, ItalyTelephone +39 (06) 45490720Fax +39 (06) 45490721Email: mailbox@ir-plc.com This information is provided by RNS The company news service from the London Stock Exchange