Empyrean Regulatory News (EME)

29 Dec 2006 08:24

Empyrean Energy PLC29 December 2006 29 December 2006 Empyrean Energy Plc ("Empyrean" or the "Company"; Ticker: (EME)) Interim Results for the six months ended 30 September 2006 Empyrean today announces its interim results for the period ended 30 September2006. Please find below the Chairman's statement and the interim accounts. CHAIRMAN'S STATEMENT I am pleased to announce that in the period since our Annual Report waspublished, Empyrean has made significant progress both with its drillingprogramme at Sugarloaf and the continued identification of developing energyresources, such as Margarita, in regions of low political risk. Having only commenced drilling during the period, testing is planned at theSugarloaf Hosston Prospect following the interpretation of wireline logs whichidentified gas saturated sands that may result in a potential reservoir. To complement its existing portfolio of projects, the Company entered into anagreement on 5 December 2006 to farmin to Project Margarita, located in Texas,USA. Drilling on this project commenced earlier this month. Preparations are also underway at the Glantal Prospect to implement a seismicprogramme in Q1 2007, while further testing is required at the Eagle Oil PoolDevelopment Prospect. Sugarloaf Hosston - Texas, USA During the period, drilling commenced at the Sugarloaf-1 well located in theonshore Gulf Coast Basin in Texas, reaching a total depth of 6,371 metres.Wireline logs were successfully run over the open hole section of the Sugarloaf-1 well between 5,182 metres and total depth. A five inch productionliner has since successfully set and cemented the Sugarloaf-1 well at 6,034metres and was tied back into the casing at 5,183 metres. Interpretation of wireline logs over the primary target indicates that anaggregate of 27.4 metres of potential reservoir are gas saturated and may becapable of commercial production after fracture stimulation. Preparation is now taking place for the fracture stimulation and testing. Themarket will be informed of timings as soon as Empyrean is advised by theoperator. Empyrean is earning a 7.5% interest until payout, and the interest reverts to a6% working interest thereafter. Project Margarita - Texas, USA On 5 December 2006, Empyrean announced that it had entered into an agreementwith the Wandoo Joint Venture (Sun Resources NL - Victoria Petroleum NL -Wandoo Energy LLC), to earn a 44% interest in the Project Margarita which is located along the Gulf Coast in Texas, USA. Drilling commenced earlier thismonth at the El Viejito Prospect. Preliminary work completed by the Joint Venture included interpretation of 530square kilometres of 3D seismic. A number of leads have been recognised in theprospective stratigraphic/structural settings at various depths ranging from1,000 metres to 4,000 metres. Having refined the shallow leads through reservoirengineering data from nearby producing analogues, the Wandoo Joint Venture hasconcluded that the prospect has a high outcome probability of success ondrilling. The El Viejito #1 well is the first of six back-to-back shallow wells plannedunder the current drilling programme. This programme is a precursor to thecommencement of a drilling programme focused on more substantial prospects at agreater depth. Eagle Oil Pool Development Project - California, USA Victoria Petroleum NL, as operator for the Eagle North-1 well on the Eagle OilPool Development Project located in the San Joaquin Basin in California, isinvestigating the alternatives for this project, including the possibility of anew horizontal completion. The target zone for re-entry and side track will bethe 177 metres of the lower Gatchell oil sands in the horizontal well bore overthe interval from 4,209 metres to 4,386 metres. Since spudding the well early in the year total depth was reached at 4,219metres. Wireline evaluations of the targeted Gatchell sands indicated oilssaturation over a 21 metre interval from 4,143 meters to 4,164 metres withinterpreted net oil pay of 13.4 metres. In the opinion of the operator, thewireline log character was similar to that seen in the Gatchell oil sands thatproduced oil at Mary Bellochi-1, 366 metres to the southeast of the EagleNorth-1 well, which have produced at rates up to 223 barrels of oil and 0.7million cubic feet of gas per day. The timing of further operations at Eagle are unclear at this stage. Empyrean has the opportunity to earn a 38.5% interest in the Eagle Oil PoolDevelopment Project by contributing 55% to the total costs of Eagle North-1. Glantal Gas Project - Germany Recent drilling of the Glantal-1 well, located in the Neues Bergland Permit nearFrankfurt was able to establish that the required seal quality lithology waspresent on the massive Pfalzer Anticline. Although testing results from theGlantal-1 well itself were disappointing, further exploration is required totest all of the anticline adequately. Recently the operator, Pannonian International Ltd, a wholly-owned subsidiary ofGalaxy Energy Corporation (AMEX: GAX) confirmed that an application to extendthe Neues Bergland Permit had been successful. Preliminary preparations are now underway to implement a seismic programme overselected portions of the anticline to enable the prioritisation of drilltargets. The seismic programme is expected to commence Q1 2007. Empyrean has the opportunity to earn 52% working interest in the GlantalProspect. Results During the six months to 30 September 2006, the Company made a loss before andafter tax of £263,537. Exploration costs of £1,659,943 for the period have beencapitalised, which relate to both exploration expenditure at the GlantalProspect, together with expenditure on the current drilling programmes at bothEagle Oil and Sugarloaf Hosston. While Empyrean has accomplished a great deal in a short period of time, theCompany intends to further accelerate its efforts going forward. The managementand employees remain dedicated to growing Empyrean into a substantial player inthe oil and gas sector and creating value for shareholders. Empyrean looks forward to reporting further on the progress of each project inboth the USA and Germany in the New Year. Patrick Cross Chairman 29 December 2006 For further information Laurence Read / Ed Portman Imran Ahmad / Cecil Jordaan Conduit PR HB-Corporate Empyrean Energy plc Tel: +44 (0) 207 429 6605 Tel: +44 (0) 207 510 8600 Tel : +44 (0) 207 182 1746 +44 (0) 797 995 5923 EMPYREAN ENERGY PLC INCOME STATEMENT FOR THE PERIOD ENDED 30 SEPTEMBER 2006 6 months to From Incorporation 10 March Year ended 2005 to 30 September 2005 30 September (unaudited) 31 March 2006 2006 (unaudited) (audited) £'000 £'000 £'000 Administrativeexpenses (303) (251) (760) ----------- ----------- -----------Operating loss (303) (251) (760) Interestreceivable 39 19 71 ----------- ----------- -----------Loss onordinaryactivitiesbeforetaxation (264) (233) (689) Taxation on loss on - - -ordinary activities ----------- ----------- -----------Loss for thefinancial year (264) (233) (689) Basic loss per shareexpressed in pence (0.75)p (0.98)p (2.5)p(please refer to Note 3) EMPYREAN ENERGY PLC BALANCE SHEET FOR THE PERIOD ENDED 30 SEPTEMBER 2006 6 months to From Incorporation 10 March 2005 to Year ended 30 September 2005 30 September (unaudited) 31 March 2006 2006 (unaudited) (audited) £'000 £'000 £'000Assets Non-currentassetsIntangibleassets 5,520 662 3,860Tangible 7 9 7assets ----------- ----------- ----------- 5,527 671 3,867Current assetsOtherreceivables 326 58 239Cash 1,188 2,964 3,210 ----------- ----------- ----------- 1,514 3,022 3,449Liabilities CurrentLiabilitiesOther payables (20) (33) (123) ----------- ----------- ----------- Net currentassets 1,496 2,089 3,326 ----------- ----------- ----------- Net assets 7,021 3,660 7,193 ----------- ----------- ----------- Shareholders'equityCalled upshare capital 71 61 70Share premiumaccount 7,756 3,829 7,665Other reserves 147 3 147Retained loss (953) (233) (689) ----------- ----------- -----------Total Equity 7,021 3,660 7,193 EMPYREAN ENERGY PLC CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 SEPTEMBER 2006 6 months to From Incorporation 10 March 2005 to 30 Year ended September 2005 30 September (unaudited) 31 March 2006 2006 (unaudited) (audited) £'000 £'000 £'000 Net cash outflowfrom operating Activities (394) (241) (769) Interestreceived 39 19 71 ----------- ----------- -----------Net cashinflow fromreturns oninvestments 39 19 71 Payment toacquireintangibleassets (1,738) (696) (3,854)Payment toacquiretangibleassets (3) (10) (12) ----------- ----------- -----------Net cashoutflowfromcapital (1,741) (707) (3,866)expenditure ----------- ----------- -----------Net cashoutflowbefore (2,096) (929) (4,564)financing Issue ofordinaryshare 94 4,230 8,146capitalShare issuecosts (20) (337) (372) ----------- ----------- -----------Net cashinflow fromfinancing 74 3,893 7,774 ----------- ----------- -----------Increase/(decrease) in (2,022) 2,964 3,210cash ----------- ----------- ----------- EMPYREAN ENERGY PLC STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 SEPTEMBER 2006 Called up share Share Other Retained Total capital premium Reserves Loss Shareholders Equity £'000 £'000 £'000 £'000 £'000 Shares issuedduring theperiod 70 8,076 - - 8,146Share issueexpense - (411) - - (411)Equity-settledshare-basedpayments - - 127 - 127Equity-settledshare issueexpenses - - 20 - 20Loss for theperiod - - - (689) (689) -------- --------- --------- -------- ---------Balance at 31March 2006 70 7,665 147 (689) 7,193 Shares issuedduring theperiod 1 93 - - 94Share issueexpense - (2) - - (2)Loss for theperiod - - - (264) (264) -------- --------- --------- -------- --------- Balance at 30September 2006 71 7,756 147 (953) (7,021) EMPYREAN ENERGY PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2006 1. Basis of preparation The interim results have not been audited but were the subject of an independentreview carried out by the Company's auditors, Chapman Davies LLP. Their reviewconfirmed that the figures were prepared using applicable accounting policiesand practices consistent with those adopted in the statutory accounts for theyear ended 31 March 2006. The figures for the year ended 31 March 2006 have beenextracted these accounts, which have been directed with the Registrar ofCompanies and contained an unqualified audit report. The financial information contained in this document does not constitutestatutory accounts as defined by Section 240 of the Companies Act 1985. In theopinion of the directors the financial information for this period fairlypresents the financial position, result of operations and cash flows for thisperiod. 2. Segmental Analysis All administration costs were incurred by the Company in the United Kingdom. Capitalised exploration, evaluation and development expenditure can be analysedby the following geographical segments: 6 months to From Year ended Incorporation 10 March 2005 to 30 September 2005 30 September (unaudited) 31 March 2006 2006 (unaudited) (audited) £'000 £'000 £'000 Continental Europe 2,559 662 2,027 North America 2,961 - 1,833 ----------- ----------- --------- 5,520 662 3,860 3. Earnings per share The calculation of earnings per share is based on the loss after taxationdivided by the weighted average number of share in issue during the period: 6 months to From Year ended Incorporation 10 March 2005 to 30 September 2005 30 September (unaudited) 31 March 2006 2006 (unaudited) (audited) £'000 £'000 £'000 Net loss after taxation (£'000) (264) (233) (689) Weighted average number of ordinary shares used in calculating basic earnings per share 35,252,083 23,812,306 27,310,455 Basic loss per share (expressed in pence) (0.75)p (0.98)p (2.5)p As the inclusion of the potential ordinary shares would result in a decrease inthe loss per share they are considered to be antidilutive and, as such, adiluted loss per share is not included. EMPYREAN ENERGY PLC NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 30 SEPTEMBER 2006 4. Called Up Share Capital The authorised share capital of the Company and the called up and fully paidamounts at 30 September 2006 were as follows: £'000 Authorised 1,000,000,000 ordinary shares of 0.2p each 2,000,000 Issued and fully paid 35,311,052 ordinary shares of 0.2p each 70,622 Share options and warrants The following equity instruments have been issued by the Company and have notbeen exercised at 30 September 2006: Number of ordinary shares Exercise Expires price Incentive options 1,250,000 35 pence 31 December 2008Incentive options 250,000 40 pence 31 December 2008IPO Warrants 1,173,333 35 pence 27 July 2007 This information is provided by RNS The company news service from the London Stock Exchange