EDR.L Regulatory News (EDR)

23 Oct 2007 07:01

Egdon Resources PLC23 October 2007 For Immediate Release 23 October 2007 EGDON RESOURCES PLC ("THE COMPANY") Preliminary Results for the year ended 31 July 2007 Egdon Resources Plc (AIM: EDR), the UK focussed energy company, is pleased toannounce preliminary results for the year ended 31 July 2007. Operational Highlights Gas Storage •Portland Gas Storage Project parameters confirmed as 1,000 million cubic metres capacity facility with injection/ withdrawal rates of 20 million cubic metres per day •Planning applications and pipeline construction authorisation application submitted for Portland Gas Storage Project in March 2007 •Front end engineering design completed and invitation for tender package issued during September for the pipeline and facilities construction •New project announced for potential salt cavern gas storage project at Larne Lough, County Antrim, Northern Ireland Oil & Gas Exploration •Acquisition of PEDL005 (Remainder) containing the Keddington Oil Field which was restored to production during June 2007 •Production testing ongoing at Avington-3z well •Acquisition of four licences from Stag Energy Limited •Farm-outs concluded for wells in licences PEDL071 and PEDL141 •Drilling activity planned at Burton Agnes, Grenade and Tees during late 2007 •Currently holds 24 licences in UK and France Financial Highlights •Loss for period of £537,968 (2006: £519,250) •Loss per share of 0.85p (2006: 0.94p) •Net funds as at 31st July 2007 £7.9 million (31st July 2006: £1.89 million) •Completion of an institutional placing during October 2006 to raise £11.52 million net of expenses •Completion of an institutional placing during September 2007 to raise £4.8 million net of expenses Commenting on the results, Philip Stephens, Chairman of Egdon, said: "2006/7 has been another year of progress in our two activities of oil and gasexploration and production and gas storage development. As previously reportedwe are on track to achieve the creation of two separate companies by way of ademerger so that shareholders will own shares in each distinct business, both ofwhich will be admitted to AIM." For further information please contact: Egdon Resources PlcAndrew Hindle, Joint Managing Director 01256 702 292Mark Abbott, Joint Managing Director Buchanan CommunicationsNicholas Melson 020 7466 5000 Seymour PierceJonathan Wright 020 7107 8000 CHAIRMAN'S STATEMENT The results for the year to 31st July 2007 show a consolidated loss beforetaxation of £537,968 (2006: £519,250). No dividend is being proposed. Thecompany had net cash balances at the year end of £7.9 million (2006: £1.89million). In October 2006, we completed a placing with institutions to raise £12million before costs. A second institutional placing in September 2007 realised£5 million before costs. As a result we have been able to continue to fund thedevelopment of our gas storage projects and also our drilling and developmentprogramme in our oil and gas activity. Gas Storage The key achievement in our gas storage activity was the submission in March 2007of a number of planning applications to Dorset County Council and Department ofBusiness, Enterprise and Regulatory Reform (formerly the DTI) covering thecreation of salt storage caverns on Portland, Dorset and the constructing of apipeline connecting the storage facility with the National Gas Grid. The UnitedKingdom is moving from being self sufficient from its reserves in the North Seato being a net importer as these reserves decline. The creation of this gasstorage facility is therefore a significant national project. Dorset CountyCouncil is co-ordinating consideration of the applications on behalf of thenumerous councils and agencies involved. The time required for consideration hastaken longer than originally expected to accommodate requests for additionalsupporting information to the applications, in respect of new archaeologicalfieldwork, geotechnical and other surveys and the adoption of additionalenvironmental mitigation measures. These works and designs have now beencompleted and we expect a decision to be made during the first quarter of 2008.The front-end engineering design work was completed in September 2007 andinvitation to tender packages have been sent out to pre-qualified companies forconstruction of the facilities and pipelines. On this basis, contracts could begranted on award of planning permission to enable construction to commenceimmediately, and first gas stored in the facility on time during 2011. We were pleased to announce in July a new gas storage project in NorthernIreland. We have been granted an exploration licence from the Crown Estate toevaluate a storage project at Larne Lough, County Antrim. Northern Ireland atpresent has no gas storage facilities and if, following the seismic programme tobe undertaken by the end of 2007, the suitability of the site is confirmed, thenplanning will be sought to develop this important strategic facility. Thefunding of the evaluation of this project will be largely met from the proceedsof the placing of shares in September this year, which realised £5 millionbefore expenses. Clearly it has been an encouraging year for Portland Gas and we look forward tobeing able to announce the grant of planning permission so that construction ofthe storage caverns can commence on Portland. Oil and Gas Exploration and Production There have been a number of additions to our oil and gas exploration andproduction business through acquisition. Earlier in the year, as mentioned in myinterim statement, we acquired the Keddington Oil Field in the East Midlands for£250,000 in cash. Production has been restarted in one of the two wells and iscurrently producing around 40-45 barrels of oil per day. We plan to optimiseproduction from the field during the coming year with restoration of productionfrom a second well. In October we completed the acquisition of four licences in the East Midlandsfrom Stag Energy Limited for a total consideration of £125,000 of which £100,000was payable in cash and the balance by the issue of Egdon shares. Thisacquisition adds significant acreage to one of our core areas and has thepotential to add material reserves. We will initially focus our efforts on thepotential identified in the Eakring-Dukes Wood oil field. In August we announced that production testing of our well at Avington, which isoperated by Star Energy Plc, produced at 470 barrels per day. We have a 20 percent interest in this well and these early results are very encouraging. Furthertesting is currently taking place to establish the full potential for oilrecovery and we will announce the results in due course. At our Kirkleatham gas discovery our plan is to sell gas to a local industrialuser. Negotiations are proceeding and we hope to have the field on productionduring 2008. Outlook As previously mentioned we expect the planning decision for our Portland GasStorage project in the first quarter of 2008. Assuming a positive outcome, wewill be in a position to proceed with financing arrangements for theconstruction. Together with our advisors we are already considering variousoptions in order to maximise value to our shareholders. We have achieved our previously stated aim in our oil and gas division to moveinto production in 2007 and first revenues are now being received. Furtherdevelopment plans should see increasing production and revenues in 2008. We canalso look forward to wells on the Burton Agnes, Grenade and Tees prospectsduring the remainder of 2007. The demerger is now planned to become effective in January 2008 subject toapproval at an Extraordinary General Meeting and a separate circular will besent shortly to shareholders giving full details. All in all, 2007 has been another exciting year and, with every expectation thatour important goals will be achieved soon, we thank shareholders for theircontinuing support. I would also like, once again, on behalf of the Board, topay tribute to the hard work of our expanding team led by Mark Abbott and AndrewHindle. Philip Stephens 22 October 2007 EGDON RESOURCES PLC Consolidated Profit and Loss Account FOR THE YEAR ENDED 31 JULY 2007 2007 2006 Notes £ £ Turnover 41,397 13,991 Cost of sales (53,396) (14,000) Gross loss (11,999) (9) Administrative expenses (987,651) (931,503) Other operating income 59,123 247,708 Operating loss (940,527) (683,804) Interest receivable 402,559 164,554 Loss on ordinary activities before (537,968) (519,250)taxation Taxation on loss on ordinary - -activities Loss for the year (537,968) (519,250) Basic and diluted loss per share 1 (0.85)p (0.94)p There were no recognised gains or losses other than the loss for the year. The consolidated profit and loss account has been prepared on the basis that alloperations are continuing. EGDON RESOURCES PLC Consolidated Balance Sheet As At 31 July 2007 2007 2006 Notes £ £FIXED ASSETSIntangible assets 14,735,661 8,284,367Tangible assets 147,304 2,503 14,882,965 8,286,870 CURRENT ASSETSOil stock 24,169 -Debtors 640,625 1,037,403Investments 7,740,584 1,506,190Cash at bank and in hand 159,092 386,837 8,564,470 2,930,430 CREDITORS: due within one year (2,015,593) (927,562) NET CURRENT ASSETS 6,548,877 2,002,868 TOTAL ASSETS LESS CURRENT LIABILITIES 21,431,842 10,289,738 PROVISION for LIABILITIES (246,591) (411,520) NET ASSETS 21,185,251 9,878,218 CAPITAL and RESERVES Called up share capital 654,657 571,499Share premium account 2 20,387,373 8,625,530Profit and loss account 2 143,221 681,189 SHAREHOLDERS' FUNDS 21,185,251 9,878,218 EDGDON RESOURCES PLC Consolidated Cash Flow Statement For The Year Ended 31 July 2007 2007 2006 Notes £ £ Net cash outflow from operating activities 3 (1,161,991) (705,598) Returns on investment and servicing of financeBank and investment interest receipts 402,559 164,554 Capital expenditure and financial investmentPayments to acquire intangible fixed assets (4,917,427) (5,326,500)Payments to acquire tangible fixed assets (161,493) (1,448) (5,078,920) (5,327,948) Net cash flow before use of liquid resourcesand financing (5,838,352) (5,868,992) Management of liquid resources(Increase)/decrease in short term deposits (6,234,394) 538,390 FinancingProceeds from issue of ordinary shares 12,325,001 4,999,500Costs associated with share issue (480,000) (186,026) (Decrease) in cash 4 (227,745) (517,128) Reconciliation of net cash flow to movementin net funds(Decrease) in cash in the year (227,745) (517,128)Cash to increase/(decrease) liquid resources 6,234,394 (538,390) Change in net funds 6,006,649 (1,055,518)Net funds at 1 August 2006 1,893,027 2,948,545 Net funds at 31 July 2007 7,899,676 1,893,027 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2007 1. LOSS PER SHARE 2007 2006 £ £ Net loss for the financial year (537,968) (519,250) Basic weighted average ordinary shares inIssue during the year 63,392,512 55,110,604 Pence Pence Basic loss per 1p ordinary share (0.85) (0.94) The basic earnings per share has been calculated on the loss on ordinaryactivities after taxation of £537,968 divided by the weighted average number ofordinary shares in issue of 63,392,512 during the period. The share optionswhich were outstanding at 31 July 2006 are not considered dilutive as theirinclusion would decrease the loss per share. For this reason a diluted earningsper share calculation is not required. No other instruments which may bedilutive are in issue. 2. RESERVES Share Profit and premium lossGroup account account Total £ £ £ At 1 August 2006 8,625,530 681,189 9,306,719On shares issued in the year 12,241,843 - 12,241,843Share issue costs (480,000) - (480,000)Loss for the year - (537,968) (537,968) At 31 July 2007 20,387,373 143,221 20,530,594 3. RECONCILIATION OF NET OUTGOING RESOURCES TO NET CASH OUTFLOW FROM OPERATINGACTIVITIES 2007 2006 £ £ Operating loss for the year (940,527) (683,804)Depreciation 16,692 1,922Loss on disposal of intangible assets - 40,844Decrease/(increase) in debtors 396,778 (804,544)(Increase) in stock (24,169) -(Decrease)/increase in creditors (445,836) 421,964(Decrease)/increase in provisions (164,929) 318,020 (1,161,991) (705,598) 4. ANALYSIS OF CHANGES IN NET CASH RESOURCES AND DEBT As at As at 1 August Cash 31 July 2006 flow 2007 £ £ £ Cash at bank and in hand 386,837 (227,745) 159,092 Current asset investments 1,506,190 6,234,394 7,740,584 1,893,027 6,006,649 7,899,676 5. BASIS OF PRESENTATION The financial information set out in this announcement, which does notconstitute the statutory accounts of the Group, is extracted from theconsolidated audited statutory accounts for the year ended 31 July 2007, whichwere approved by the Board on 22 October 2007. The auditors have reported onthose accounts in accordance with section 235 of the Companies Act 1985. Theirreport was unqualified and did not contain a statement under section 237(2) or237(3) of the Companies Act 1985. The statutory accounts for the year ended 31July 2006 have been delivered to the Registrar of Companies. Those for 2007 willbe delivered after the Annual General Meeting. The results have been prepared onthe basis of the accounting policies adopted in the statutory accounts for theyear ended 31 July 2006. 6. APPROVAL The preliminary announcement was approved by the Board on the 22 October 2007. This information is provided by RNS The company news service from the London Stock Exchange