Europa Oil & Gas Regulatory News (EOG)

Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG / Sector: Oil & Gas 15 April 2014 Europa Oil & Gas (Holdings) plc (`Europa' or `the Company') Interim Results Europa Oil & Gas (Holdings) plc, the AIM listed oil and gas exploration andproduction company with a combination of producing, appraisal and explorationassets in Europe, announces its interim results for the six month period ended31 January 2014. Highlights * Béarn des Gaves permit onshore France renewed * Acquired 3-D seismic offshore Ireland * Produced 170 barrels of oil equivalent per day ("boepd") (H1 2013: 177 boepd) * Secured a 12 month extension on PEDL181, onshore UK * Raised £4m in new equity via a placing and oversubscribed open offer * Fully funded for 2014 drilling and exploration programme Financial performance * Revenue £2.1m (H1 2013: £2.2m) * Pre-tax profit £0.45m (H1 2013: pretax profit £0.20 m) * Net cash generated from operations £0.6m (H1 2013: £1.0m) * Cash balance at 31 January 2014 £4.8m (31 Jan 2013: £0.8m) Post reporting date events * Appointed Colin Bousfield to the Board as non-executive director * Issued 940,000 share options at 8.9 pence * RBS overdraft facility renewed * Tarbes Val d'Adour permit onshore France renewed * Started well permitting and planning for the Kiln Lane well Europa's CEO Hugh Mackay said, "Europa is fully funded for four explorationwells. Onshore UK we expect two exploration wells, Wressle and Kiln Lane, willbe spudded in 2014, and we have further drilling candidates to follow. Thissummer we expect a drilling decision for our offshore Ireland licences which ifpositive may lead to two exploration wells, one in FEL 2/13 and one in FEL 3/13. Europa's costs for both these potential wells are already funded by farm-inand the first one could be as early as 2015. Finally in France we havecommenced well planning and permitting for a Berenx Shallow exploration well inparallel with farmout activity. Exploration success in the UK will boost cashflow and will enable portfolio growth; we believe exploration success in Franceor Ireland would be a company maker." For further information please visit www.europaoil.com or contact: Hugh Mackay / Phil Greenhalgh Europa +44 (0) 20 7224 3770 Matt Goode / Henrik Persson finnCap Ltd +44 (0) 20 7600 1658 Frank Buhagiar / Lottie St Brides Media and +44 (0) 20 7236 1177Brocklehurst Finance Ltd Qualified Person Review This release has been reviewed by Hugh Mackay, Chief Executive of Europa, whois a petroleum geologist with 30 years' experience in petroleum exploration anda member of the Petroleum Exploration Society of Great Britain, AmericanAssociation of Petroleum Geologists and Fellow of the Geological Society. MrMackay has consented to the inclusion of the technical information in thisrelease in the form and context in which it appears. Chairman's Statement In last year's Interim Statement I began with our corporate objective: to builda top quartile oil and gas company on AIM, capitalised at over £100 million byDecember 2017. To achieve this we need to continue to mature and grow ourportfolio of prospects and leads and most importantly prove these up via thedrill bit. One year on, considerable progress has been made in terms of addingto our prospect inventory, specifically the Berenx Shallow prospect onshoreFrance and the Kiln Lane prospect onshore UK. As a result, our licences inFrance, the UK and Ireland now have net mean risked resources of 43 millionbarrels of oil equivalent ("mmboe"). The rest of 2014 is highly active and willsee us drill two conventional wells targeting an aggregate 5 million barrels ofgross prospective resources and with the potential to substantially increaseour daily production. Equally importantly I expect that our future workprogramme in Ireland will be defined during summer 2014 and this could includedrilling as early as 2015. The first well in which we will participate is the 2.1mmboe Wressle prospectoperated by Egdon Resources and is expected to spud in the next couple ofmonths. We intend to follow this later in 2014 with a Europa-operated welltargeting the 2.9mmboe Kiln Lane prospect also in the East Midlands PetroleumProvince. Having secured a twelve month extension for the licence, wellpermitting and planning for Kiln Lane is underway and we have appointed ZenithEnergy to provide well management services for the project. We are particularly excited about Kiln Lane which has the potential to be aplaymaker well, opening up a new conventional oil and gas play and de-riskingmultiple leads already identified in the licence. This 540km2 licence has neverbeen drilled and while the well will evaluate a conventional oil and gasprospect it will also be an important stratigraphic test providing data on thepetroleum system operating in the basin. The area's prospectivity forunconventional hydrocarbons has been the subject of speculation in recentmonths, particularly following the entry of Centrica, GDF Suez and Total intothe UK unconventional sector. Kiln Lane is a conventional oil exploration welland is not targeting shale gas, but may provide information with which toassess the unconventional hydrocarbon potential in the licence. In order tofund the Kiln Lane well, in January, we announced the completion of a placingof shares with institutional investors which raised £2.86 million beforeexpenses. In addition we launched an open offer to all shareholders to raise upto a further £1.16 million before expenses. The open offer closed on 17 Januaryand was over-subscribed. In October 2013 we announced the completion of a 1,500km2 3-D seismicacquisition over our two licences in the South Porcupine Basin, offshoreIreland. Kosmos Energy Ireland Limited ("Kosmos") is operator and holder of an85% interest in both licences with Europa holding the remaining 15%. In thenext few weeks we expect to receive the processed data set for the seismic.Alongside Kosmos, we will immediately set about interpreting and mapping thedata with a view to clarifying the prospectivity of the two blocks on whichEuropa previously mapped billion barrel prospects using historic 2-D data. Thisstate of the art 3-D seismic is likely to change the volumetrics of ourprospects and also markedly de-risk the assets. A decision to drill on one orboth of the licences is expected in the summer of 2014 and we understand thatKosmos may elect to drill a well as early as 2015. In France, Europa holds 100% interest in the Béarn des Gaves ("Béarn") andTarbes Val d'Adour ("Tarbes") permits, located in the proven Aquitaine Basin.Béarn holds two potential company-makers: the Berenx Shallow gas prospect andthe Berenx Deep gas appraisal prospect. The permit was renewed in October 2013and we have since opened a data room to secure a farm-in partner with anintention to drill the Shallow prospect. Talks are on-going with interestedparties. To ensure we are in a position to drill a well at the earliestopportunity we are already advancing well planning and permitting. Post periodend the Tarbes permit was extended until January 2015. We have started talkingto potential partners with whom we can take the permit forward. Financials During the first half of 2014 an average of 170 boepd were recovered from ourthree UK onshore fields which generated £2.1 million in revenues (H1 2013: 177boepd and £2.2 million). Our production is on course to hit its full yeartarget for the third consecutive year, a testament to the success of ouron-going field management programme. Net cash generated from operations was £0.6 million (H1 2013: £1.0 million) and we collected £0.3 million from Kosmosin connection with their farm-in to Ireland. Combined with the proceeds of theplacing and open offer this gave us a cash balance at the period end of £4.8million (31 July 2013: £0.7 million). Board I am delighted to welcome Colin Bousfield to the Board. His extensive trackrecord as investment banker with Barclays, RBS, Bank of Scotland andCommonwealth Bank of Australia in securing debt and equity finance for oil andgas operating companies of all sizes, as well as his successful tenure as CFOfor Composite Energy, makes Colin a valuable addition to our team during whatis shaping up to be an exciting period for Europa. Outlook We are set to enter the next phase in Europa's development as we start toprove-up our resources via the drill bit. The Board is confident that we candeliver on our objective and build a top quartile exploration and productioncompany. Finally, I would like to thank the management and operational teams, directorsand advisers for their hard work and also our shareholders for their continuedsupport over this six month period. WH Adamson Chairman, 14 April 2014 Operational review Europa operates exploration, production and appraisal assets across three coreEU countries: the UK, France and Ireland. Ireland - Porcupine Basin Frontier Exploration Licences (`FELs') 2/13 and 3/1315% (Mullen and Kiernan) The exploration model for these licences is the Cretaceous stratigraphic play:comprising Early Cretaceous turbidite sandstone reservoirs; charged by matureLate Jurassic and Early Cretaceous source rocks and contained in stratigraphictraps with elements of structural closure. The Cretaceous play in Ireland isessentially undrilled and is considered to be analogous to the Cretaceous playin the equatorial Atlantic Margin province that has delivered the Jubilee andMahogany oil fields. Europa's interpretation of pre-existing 2-D seismic identified two previouslyunknown prospects in the Lower Cretaceous stratigraphic play: Mullen in FEL 2/13 and Kiernan in FEL 3/13. The Company estimates these to have gross meanun-risked indicative resources of 482 million barrels of oil and 1.612 billionbarrels of oil equivalent respectively. Information about the Mullen andKiernan prospects were provided to the markets in press releases dated 6November 2012 and 16 January 2013. Under the terms of the farm-in Kosmos fully funded the costs of the 3-D seismicprogramme on each FEL. Contingent upon an election of the companies to enterinto the second phase of the FEL, which carries a drilling commitment, Kosmoswill incur 100% of the costs of the first exploration well on each licence. Thefirst exploration wells on FEL 2/13 and FEL 3/13 have investment caps of US$90million and US$110 million respectively. Costs in excess of the investment capwould be shared between Kosmos (85%) and Europa (15%). The 3-D seismic acquired over the licences is a very significant first steptowards realising the hydrocarbon potential of the basin. Based on the historic2-D seismic, Europa estimates geological risk to be around 1 in 10 for both theKiernan and Mullen prospects. 3-D seismic has the potential to substantiallyde-risk these prospects, particularly if features like conformance, flat eventsand AVO anomalies are observed on the data. It is anticipated that theindicative resources previously provided to the market will change according tothe vastly improved prospect mapping arising from the recently acquired stateof the art 3-D data. The prospect sizes will likely remain large and thequantum of resources is likely to be hundreds of millions of barrels. Europaestimates the minimum economic prospect size offshore Ireland to be 100±20mmbbls. We believe that exploration success would be a company maker forEuropa. Fast-track 3-D data was delivered at the end of December 2013. Processed datais expected in the next few weeks, at which point interpreting and mapping thedata with a view to clarifying and de-risking the prospectivity of the twoblocks will commence. This work will deliver a new prospect inventory duringsummer 2014 followed by a CPR later in 2014. Subject to the results, Kosmos mayelect to drill a well, in which Europa will have a carried 15% interest (up toa cap highlighted above), as early as 2015. The technical insights that Europa continues to gain from its work in the SouthPorcupine Basin provides a competitive edge that the directors will seek toexploit through participation in the next licensing round in Ireland which isdue to open in June 2014. France - Béarn des Gaves 100% (Berenx) Europa holds a 100% interest in the onshore Béarn des Gaves permit in theAquitaine basin, the heartland of the French oil industry. The permit containstwo prospects: Berenx Deep and Berenx Shallow. Berenx Deep is an appraisalproject having previously been explored and drilled by EssoRep with two wells,Berenx-1 (1969) and Berenx-2 (1972), both encountering strong gas shows over a500m thick gas bearing zone. In 1975 Berenx-2 was re-entered, drill stem testedand flowed gas to surface from the same carbonate reservoir that delivered 9tcf and 2 tcf from nearby fields at Lacq and Meillon. Europa's in-house technical work indicates that the Berenx deep appraisalprospect could hold in excess of 500 bcf of recoverable gas resources. In a CPRdated 31 May 2012, ERC Equipoise estimated gross mean un-risked resources of277 bcf for the Berenx deep gas play. The difference between Europa's and ERC'sassessment of resources reflects the confidence of each party in mapping in ageologically complex terrain. Europa was able to map a larger area of closureand as a consequence larger resources. Thorough re-evaluation and interpretation of existing seismic and well data onthe permit has resulted in the definition of a new shallow gas prospect, BerenxShallow. Previous exploration on the concession had focused only on the deepgas prospectivity. A comprehensive review of historic well results,re-interpretation of structure and better understanding of proven hydrocarbonbearing reservoir distribution in the shallow Cretaceous and Late Jurassiccarbonate sediments by Europa has upgraded the Berenx Shallow gas prospectivityand suggests potential gross mean un-risked resources of 416 bcf. The Company's strategy for Béarn des Gaves is to first target the shallow gasplay, drill a well to deliver a commercial flow rate and, on the back ofcommercial success, to further appraise the shallow prospectivity and undertakework to de-risk the Berenx Deep appraisal prospect. The anticipated total depthof the Berenx Shallow well is approximately 2,500m. On 3 October 2013, the permit was successfully renewed for a period of fiveyears from 22 March 2012 and carries an expenditure commitment of approximately€2.5 million. A farm-out process for the permit is currently underway in tandemwith well planning and permitting for a well location on Berenx Shallow aheadof drilling in the next 18 months. We believe that exploration success atBerenx Shallow would be a company maker for Europa. The permit benefits from being located only 20km from the Lacq Field, whichpotentially provides a straightforward export route, allowing gas to beprocessed in an existing facility with spare capacity. France - Tarbes Val d'Adour 100% Europa holds a 100% interest in the Tarbes Val d'Adour permit (`Tarbes'), inthe proven Aquitaine Basin, onshore France which post period end was extendeduntil 18 January 2015. Tarbes contains several oil accumulations that werepreviously licensed by Elf but were abandoned in 1985 due to a combination oftechnical issues and low oil prices. Two fields, Jacque and Osmets, weredrilled using vertical wells which generated modest production levels and as aresult Tarbes is an appraisal project. A farm-out process was recently launchedto secure a partner with whom to advance the permit. UK - NE Lincolnshire - PEDL180 33.3% (Wressle) PEDL180 covers an area of 100km2 of the East Midlands Petroleum Province southof the Crosby Warren field. Europa has a 33.3% working interest in the blockwith its partners Egdon Resources (operator, 25%), Celtique Energie PetroleumLtd (33.3%) and Union Jack Oil (8.3%). 49km2 of 3-D seismic acquisitioncovering PEDL180 and PEDL182 was acquired in 2012 and has been processed andinterpreted. The operator estimates the Wressle prospect to hold mean grossun-risked recoverable resources of 2.1mmbo. Drilling at Wressle is planned totake place in the next quarter. UK - NE Lincolnshire - PEDL181 50% (Kiln Lane) Europa has a 50% interest in and is the operator of the PEDL181 licence, withEgdon Resources UK Limited and Celtique Energie Petroleum Ltd, each holding a25% interest. PEDL181 is located in the Carboniferous petroleum play and coversan area of over 540km2 in the Humber Basin. The licence has good potential forconventional oil and gas and unusually for the East Midlands Petroleum Provincehas never been previously drilled. The licence is located in a workinghydrocarbon system where a number of discoveries have been made along theBrigg-Broughton anticline, including Europa's existing oil production at theCrosby Warren field at the westernmost end of the anticline. Technicalevaluation has confirmed several conventional prospects/leads on PEDL181. Fourof these in the southern part of the licence, all with reservoirs ofCarboniferous age, were the focus of a 78km 2-D seismic acquisition programmethat was completed in April 2013. Reprocessing of 150km2 of existing 3-Dseismic data has been performed together with processing of the new dataresulting in the maturing of a drill ready prospect, Kiln Lane, with grossun-risked prospective resources of 2.9mmboe. In addition to the conventional prospectivity the Humber basin may also haveunconventional hydrocarbon potential. Interpretation of the new seismic datasuggests that this basin may contain a much thicker sequence of Namurian agesediments than was previously thought. To date this sedimentary package has notbeen drilled in the Humber basin. The Namurian section in the GainsboroughTrough basin, located some 25km to the west of PEDL181 has been drilled and isknown to host the Bowland Shale which has well documented potential for shalegas. It is possible that the Namurian section in the Humber basin may contain aBowland Shale equivalent with similar potential for unconventionalhydrocarbons. UK - Lincolnshire area - PEDL150 100% (West Whisby) In the period we completed the abandonment of the Hykeham well. On completion,our partner Valhalla, who previously held a 25% interest, elected to withdrawfrom the licence. We are conducting a review to determine if there is furtherprospectivity in the licence area. UK - Dorking area - PEDL143 40% (Holmwood) We consider Holmwood to be one of the most exciting undrilled explorationprospects in the UK. As set out in the Company's final results and report forthe year ended 31 July 2013, we continue to work with our legal advisers inpreparation for a hearing in the Court of Appeal at the end of April, or earlyMay, 2014 in respect of our application for planning permission for a temporaryexploration well on this site. UK - Production (West Firsby 100%; Crosby Warren 100%; Whisby W4 well 65%) The three UK fields produced an average of 170 boepd during the six monthperiod under review and full year production is on course to meet expectationsof 165 boepd. The full year production target was met in each of the previoustwo years. UK - Unconventional resources - Shale Gas As previously noted PEDL181 may have potential for shale gas. Conclusion With two fully funded UK onshore wells to be drilled in the next nine months,and a prospect inventory and CPR for the Irish licences also due, the secondhalf promises to be a highly active period for the Company, one that could seea number of value trigger events including a decision by Kosmos to drilloffshore Ireland. At the same time farm-out discussions for our two onshoreFrance permits and well planning / permitting to drill the Berenx shallow gasprospect are being advanced. In tandem with advancing our existing projects, wecontinue to look to add new ventures to our portfolio that match our criteria.With all this activity in mind I look forward to providing updates on ourprogress. Hugh Mackay CEO Licence Interests Table Field/Country Area Licence Prospect Operator Equity Status DL003 West Firsby Europa 100% Production DL001 Crosby Warren Europa 100% Production PL199/215 Whisby-4 BPEL 65% Production East UK Midlands PEDL150 West Whisby Europa 100% Exploration PEDL180 Wressle Egdon 33% Exploration PEDL181 Kiln Lane Europa 50% Exploration PEDL182 Broughton Egdon 33% Exploration Weald PEDL143 Holmwood Europa 40% Exploration FEL 2/13 Mullen Kosmos 15% ExplorationIreland Porcupine FEL 3/13 Kiernan Kosmos 15% Exploration Béarn des Gaves Berenx Deep Europa 100% Exploration/Appraisal France Aquitaine Béarn des Gaves Berenx Shallow Europa 100% Exploration/Appraisal Tarbes val d'Adour Osmets/Jacque Europa 100% Exploration/Appraisal Romania Carpathians EPI-3 Brates Europa 100% Being relinquished Financials Unaudited consolidated statement of comprehensive income 6 months to 6 months to Year to 31 January 31 January 31 July 2014 2013 2013 (audited) £000 £000 £000 Revenue 2,060 2,202 4,503 Other cost of sales (1,100) (1,452) (2,954) Exploration write-off - - (231) Total cost of sales (1,100) (1,452) (3,185) -------- -------- -------- Grossprofit/ (loss) 960 750 1,318 Administrative expenses (396) (413) (718) Finance income 7 - 15 Finance expense (120) (147) (208) -------- -------- -------- Profitbefore taxation 451 190 407 Taxation (231) (137) (508) -------- -------- -------- Profit/ (loss) for the periodattributed 220 53 (101)to the equity holders of the parent Other comprehensive income Exchange (losses)/ gains arising on (6) 73 37translation of foreign operations -------- -------- -------- Total comprehensive profit/(loss)for the 214 126 (64)period attributable to the equityshareholders of the parent ======== ======== ======== Pence per Pence per Pence per share share share Earnings/ (loss)per share (EPS/LPS) Basic and diluted EPS/LPS (note 4) 0.15p 0.04p (0.07)p Unaudited consolidated statement of financial position 31 January 31 January 31 July 2014 2013 2013 (audited) £000 £000 £000 Assets Non-current assets Intangible assets 2,594 2,408 2,446 Property, plant and equipment 4,134 4,712 4,383 -------- -------- -------- Total non-current assets 6,728 7,120 6,829 -------- -------- -------- Current assets Inventories 43 53 33 Trade and other receivables 665 550 928 Cash and cash equivalents 4,816 761 672 -------- -------- -------- 5,524 1,364 1,633 -------- -------- -------- Other current assets Assets classified as held for sale 338 334 338 Total assets 12,590 8,818 8,800 ======== ======== ======== Liabilities Current liabilities Trade and other payables (1,003) (1,357) (1,227) Current tax liability (871) (309) (541) Derivative (41) (57) (48) Short-term borrowings (197) (217) (208) Short-term provisions (21) - (290) -------- -------- -------- Total current liabilities (2,133) (1,940) (2,314) -------- -------- -------- Non-current liabilities Deferred tax liabilities (2,799) (2,847) (2,902) Long-term provisions (1,764) (2,027) (1,681) -------- -------- -------- Total non-current liabilities (4,563) (4,874) (4,583) -------- -------- -------- Total liabilities (6,696) (6,814) (6,897) -------- -------- -------- Net assets 5,894 2,004 1,903 ======== ======== ======== Capital and reserves attributable to equity holders of the parent Share capital 2,049 1,379 1,379 Share premium 14,080 13,160 13,160 Merger reserve 2,868 2,868 2,868 Foreign exchange reserve 411 453 417 Retained deficit (13,514) (15,856) (15,921) -------- -------- -------- Total equity 5,894 2,004 1,903 ========= ======== ======== Unaudited consolidated statement of changes in equity Share Share Merger Foreign Retained Total capital premium reserve exchange deficit equity reserve £000 £000 £000 £000 £000 £000 Unaudited Balance at 1 August 1,379 13,160 2,868 380 (15,972) 1,8152012 Total comprehensive - - - 73 53 126income for the period Share based payments - - - - 63 63 -------- -------- -------- -------- -------- -------- Balance at 31 January 1,379 13,160 2,868 453 (15,856) 2,0042013 ========= ========= ========= ========= ========= ========= Audited Balance at 1 August 1,379 13,160 2,868 380 (15,972) 1,8152012 Total comprehensive - - 37 (101) (64)loss for the year - Share based payments - - - - 152 152 -------- -------- -------- -------- -------- -------- Balance at 31 July 1,379 13,160 2,868 417 (15,921) 1,9032013 ========= ========= ======== ========= ======== ========= Unaudited Balance at 1 August 1,379 13,160 2,868 417 (15,921) 1,9032013 Total comprehensive - - - (6) 220 214income/(loss) for theperiod Share based payments - - - - 67 67 Issue of share 920 - -capital net of issue 670 2,120 3,710costs -------- -------- -------- -------- -------- -------- Balance at 31 January 2,049 14,080 2,868 411 (13,514) 5,8942014 ========= ========= ========= ========= ========= ========= Unaudited consolidated statement of cash flows 6 months to 6 months to Year to 31 January 31 January 31 July 2014 2013 2013 (audited) £000 £000 £000 Cash flows from operating activities Profit / (loss) after taxation 220 53 (101) Adjustments for: Share based payments 67 63 152 Depreciation 251 247 578 Exploration write-off - - 231 Finance income (7) - (15) Finance expense 120 147 208 Taxation expense 231 137 508 (Increase)/decrease in trade and other (43) 700 621receivables (Increase) / decrease in inventories (10) 3 23 (Decrease)/increase in trade and other (249) (336) (535)payables -------- -------- -------- Cash generated from operations 580 1,014 1,670 Income tax payment - - (84) -------- -------- -------- Net cash from operating activities 580 1,014 1,586 ======== ======== ======== Cash flows used in investing activities Purchase of property, plant & equipment (2) - (5) Purchase of intangibles (170) (433) (1,020) Receipt for licence back costs in 300 - -connection with farm-in Expenditure on well decommissioning (344) - (51) -------- -------- -------- Net cash used in investing activities (216) (433) (1,076) ======== ======== ======== Cash flows from financing activities Proceeds from issue of share capital (net 3,710 - -of issue costs) Decrease in payables related to share issue 120 - -costs Repayment of borrowings (11) (13) (22) Finance costs (8) (14) (34) -------- -------- -------- Net cash from/(used in)financing activities 3,811 (27) (56) ======== ======== ======== Net increase in cash and cash equivalents 4,175 554 454 Exchange loss on cash and cash equivalents (31) (23) (12) Cash and cash equivalents at beginning of 672 230 230period -------- -------- -------- Cash and cash equivalents at end of period 4,816 761 672 ======== ======== ======== Notes to the consolidated interim statement 1 Nature of operations and general information Europa Oil & Gas (Holdings) plc ("Europa Oil & Gas") and subsidiaries' ("theGroup") principal activities consist of investment in oil and gas exploration,development and production. Europa Oil & Gas is the Group's ultimate parent Company. It is incorporated anddomiciled in England and Wales. The address of Europa Oil & Gas's registeredoffice head office is 6 Porter Street, London W1U 6DD. Europa Oil & Gas'sshares are listed on the London Stock Exchange AIM market. The Group's consolidated interim financial information is presented in PoundsSterling (£), which is also the functional currency of the parent Company. The consolidated interim financial information has been approved for issue bythe Board of Directors on 14 April 2014. The consolidated interim financial information for the period 1 August 2013 to31 January 2014 is unaudited. In the opinion of the Directors the condensedinterim financial information for the period presents fairly the financialposition, and results from operations and cash flows for the period inconformity with the generally accepted accounting principles consistentlyapplied. The condensed interim financial information incorporates unauditedcomparative figures for the interim period 1 August 2012 to 31 January 2013 andthe audited financial year to 31 July 2013. The financial information contained in this interim report does not constitutestatutory accounts as defined by section 435 of the Companies Act 2006. Thereport should be read in conjunction with the consolidated financial statementsof the Group for the year ended 31 July 2013. The comparatives for the full year ended 31 July 2013 are not the Company'sfull statutory accounts for that year. A copy of the statutory accounts forthat year has been delivered to the Registrar of Companies. The auditors'report on those accounts was unqualified and did not contain a statement undersection 498 (2) - (3) of the Companies Act 2006. The information has been prepared on the going concern basis. 2 Summary of significant accounting policies The condensed interim financial information has been prepared using policiesbased on International Financial Reporting Standards (IFRS and IFRICinterpretations) issued by the International Accounting Standards Board("IASB") as adopted for use in the EU. The condensed interim financialinformation has been prepared using the accounting policies which will beapplied in the Group's statutory financial information for the year ended 31July 2014. This results in the adoption of various standards and interpretations, none ofwhich have had a material impact on the interim report or are expected to havea material impact on the financial statements for the full year. 3 Share capital The table below shows all shares issued since 31 July 2012. £000 raised net Total of commission sharesDate Shares issued Price andcosts in issue 31 July 2012 137,855,504 10 January 2014 - 47,694,665 6p 2,597 185,550,169Placing 21 January 2014 - Open 19,332,855 6p 1,113 204,883,024Offer 31 January 2014 204,883,024 All the authorised and allotted shares are of the same class and rank paripassu. Merger relief is available on the Placing shares under section 612(1) of theCompanies Act 2006, and premium has therefore been recognised within retaineddeficit rather than share premium. 4 Earnings / loss per share (EPS/LPS) Basic EPS has been calculated on the profit after taxation divided by theweighted average number of shares in issue during the period. Diluted EPS usesan average number of shares adjusted to allow for the issue of shares, on theassumed conversion of all in-the-money options. The Company's average share price for the period was 8.51p (H1 2013: 8.51p)which was above the exercise price of 1,391,626 of the 13,076,626 outstandingshare options (H1 2013: the exercise price of all 11,685,000 outstandingoptions were below the average share price). The calculation of the basic and diluted earnings/ (loss) per share is based onthe following: 6 months to 6 months to Year to 31 January 31 January 31 July 2014 2013 2013 (audited) £000 £000 £000 Profits / losses Profit/(loss) after taxation 220 53 (101) ======= ======== ======= Number of shares Weighted average number of ordinary 144,713,895 137,855,504 137,855,504shares for the purposes of basic EPS/LPS Weighted average number of ordinary 145,296,059 137,855,504 137,855,504shares for the purposes of diluted EPS/LPS 5 Taxation Consistent with the year-end treatment, current and deferred tax assets andliabilities have been calculated at tax rates that are expected to apply totheir respective period of realisation. 6 Post Reporting date On 11 February 2014, the Company issued 940,000 share options at 8.9 pence,which included 500,000 options to Colin Bousfield who was appointed on 10February. The Royal Bank of Scotland (RBS) multi-currency facility was renewed on 18February 2014. Terms were unchanged, the facility provides an overdraft of upto £700,000 interest is charged at 3% over base rate. The next renewal of thefacility is due to be 31 January 2015. * * ENDS * *