FOGL.L Regulatory News (FOGL)

20 May 2005 07:01

Falkland Oil and Gas Limited20 May 2005 Friday 20th May 2005 Falkland Oil and Gas Limited("FOGL" or "the Company") Preliminary unaudited results for the period ended 31 March 2005 FOGL is an oil and gas exploration company operating in the undrilled South andEast Falkland Basins, potentially a new petroleum province in the SouthAtlantic. Formed in May 2004, these are FOGL's maiden results following itsadmission to AIM in October 2004. Highlights • During the period FOGL: - extended its licence area by 50,000 sq km through the award of a 100% owned licence - completed a 9,450km 2D seismic survey, well in excess of the IPO plan; the results of the survey far exceeded expectations by identifying 130 leads - strengthened the management team with the appointment of a second non-executive director and a full time exploration manager • Further work is planned to define up to 20 drillable prospects by mid-2006 • Current cash position of £11 million; the company is debt free • FOGL is evaluating its funding requirements and the source of funds for the increased exploration programme • FOGL is targeting drilling of the first exploration well in 2007 John Armstrong, Executive Chairman of FOGL, said: "We have made remarkable progress since last year's IPO. The results of theseismic survey are encouraging and have upgraded the licences by providingdirect evidence of the presence of hydrocarbons. "We are now planning a much enlarged exploration programme with the aim ofdeveloping a multi-well drilling plan in 2006, with the possibility of drillingthe first exploration well in 2007. In this light, we are evaluating ourfunding requirements and the source of funds for the increased explorationprogramme. This includes the option of including another party or parties inthe project across some or all of the licence acreage. "This is the most exciting project I've been involved in for some years andthere is a real chance that the Falkland Islands will become a new petroleumprovince." Enquiries: FOGL John Armstrong, Executive Chairman 020 7490 4111 David Hudd, Deputy Chairman 07771 893 267 College Hill 020 7457 2020 Ben Brewerton / Jim Joseph Chairman's Statement Falkland Oil and Gas Limited ("FOGL") was formed in May 2004 to invest in anoffshore oil exploration programme covering approximately 33,700 sq km south andeast of the Falkland Islands. It was admitted to AIM in October 2004, raising£12 million in the process. At that time, FOGL held a 77.5% interest in sevenoffshore production licences granted by the Government of the Falkland Islands.Hardman Resources Limited holds the remaining 22.5% interest in these licences. FOGL has made a great deal of progress since its IPO. In December 2004, thecompany was awarded a 100% licence over an additional 50,000 sq kms adjacent toits existing licence areas. The 83,700 sq km area now held is equivalent to 329North Sea style blocks: as large as the Southern Gas Basin and the CentralGraben combined. In December 2004 it also commenced a 2D seismic survey. Initially planned to be3,500 km, by completion in April the survey had covered 9,450 km and frompreliminary records had identified 130 leads, far in excess of the 8 leadsidentified at the time of the IPO. The survey has indicated a larger and more diverse project than originallyanticipated and has identified numerous possible drill targets, with indicationsthat some could be of significant size. FOGL plans to conduct further seismicsurveys targeting all the leads but with particular emphasis on the 50 mostpromising. The aim will be to develop about 20 high quality, technically soundand potentially economically viable drilling prospects. During the period, the company also strengthened the management team. Asindicated at the IPO, a second non-executive director was recruited in RichardLiddell who has twenty-five years experience in the oil and gas industry.Richard was Operations Director of Premier Oil plc from 1999 until 2003 andprior to that spent two years as Director of Development at BG Exploration andProduction. The expanded scale of the project required a full time exploration manager andPatrick Bird joined FOGL to fill that role in April. Patrick has twenty-fouryears experience of the oil and gas industry including nine years at Premier Oilplc fulfilling various roles including General Exploration Manager and GeneralManager Pakistan. Patrick replaces Jim Webb who had been acting as project manager for FOGL on apart-time basis and felt unable to commit to a full-time role. The Board wishesto thank Jim for his invaluable contribution to the Company, particularly duringthe IPO process. The clear objective for FOGL is to define and prioritise 20 prospects fordrilling. The proposed programme is to conduct further 2D seismic in the secondhalf of 2005 as well as a 3D seismic survey. The Company then intends todevelop a multi-well drilling programme which is targeted to begin in 2007. Ourfocus is on progressing the exploration programme with the aim of deliveringsignificant further value to shareholders. Profit and loss account for the 10 month period ended 31 March 2005 Note 10 month period ended 31/03/05 Unaudited £ Administrative expenses (460,133) Operating Loss (460,133) Interest income 166,441 Loss on ordinary activities before taxation (293,692) Tax on loss on ordinary activities Loss on ordinary activities after taxation (293,692) Loss for the period (293,692) Loss per ordinary share - Basic and diluted 2 (0.48p) There were no recognised gains or losses in the period other than those dealtwith in the profit and loss account above. The operating loss for the period arose from continuing operations. Balance sheet at 31 March 2005 31/03/05 Unaudited Note £ £ Fixed assetsIntangible fixed assets 2,866,836Tangible fixed assets 11,277 2,878,113 Current assetsDebtors 75,434Cash at bank and in hand 11,079,976 11,155,410 Creditors: amounts fallingdue within one year (656,844) Net current assets 10,498,566 Net assets 13,376,679 Capital and reservesCalled up share capital 1,600Share premium account 4 13,668,771Profit and loss account 4 (293,692) Shareholders' equity funds 13,376,679 Cash flow statement for the period ended 31 March 2005 10 Month period ended 31/03/05 Unaudited £ Net cash outflow from operating activities 122,302Returns on investments and servicing of financeInterest received 166,441Capital expenditure and financial investmentExpenditure in respect of intangible fixed assets (2,866,836)Expenditure in respect of tangible fixed assets (12,302) Cash outflow before financing (2,590,395) FinancingIssue of ordinary share capital 14,697,514Issue costs (1,027,143) 13,670,371Increase in cash in the period 11,079,976 Reconciliation of operating loss to net cash outflow from operating activitiesOperating loss (460,133)Depreciation 1,025Increase in debtors ( 75,434)Increase in creditors 656,844 Net cash outflow from operating activities 122,302 Reconciliation of movements in shareholders' funds for the 10 month period ended 31 March 2005 10 month period ended 31/03/05 Unaudited £ Loss for the financial period (293,692) New share capital subscribed (net of issue costs) 13,670,371Net addition to shareholders' equity funds 13,376,679Opening shareholders' equity funds - Closing shareholders' equity funds 13,376,679 1. Basis of financial information The financial information in this announcement does not constitute the company'sstatutory accounts for the period ended 31 March 2005. This is the first period of financial results and accordingly no comparativeinformation has been provided. The statutory accounts for the period ended 31 March 2005 will be finalised onthe basis of the financial information presented by the directors in thispreliminary announcement and will be delivered to the Registrar of Companies.It is expected that the accounts will be posted on the website and mailed toshareholders in mid-June. 2. Loss per share The calculation of basic loss per ordinary share is based on a loss of £293,692and on 61,510,000 ordinary shares, being the weighted average number of ordinaryshares in issue during the period. There is no difference between the dilutedloss per share and the basic loss per share presented as the company reported aloss for the period and, in accordance with Financial Reporting Standard Number14, the share options in issue are not considered dilutive. 3. Dividends The directors do not propose the payment of a dividend. 4. Reserves Share Profit Premium And loss account account Total Unaudited Unaudited Unaudited £ £ £ Premium on issue of shares 14,695,914 - 14,695,914 Loss for the period (259,461) (259,461)Expenses of share issue (1,027,143) - (1,027,143) At 31 March 2005 13,668,771 (259,461) 13,409,310 Notes to Editors Falkland Oil and Gas Limited ("FOGL") is an oil and gas exploration companyfocused exclusively on opportunities offshore of the Falkland Islands. It wasadmitted to London's Alternative Investment Market ("AIM") on 14 October 2004 atan issue price of 40p. The current major shareholders of FOGL are: FalklandIslands Holdings plc (18%), Global Petroleum (16%) and RAB Capital plc (31%). At the time of the admission to AIM, FOGL held a 77.5% interest in sevenoffshore production licences covering approximately 33,700 sq km to the southand east of the Falkland Islands. FOGL holds these licences in a joint venturewith Hardman Resources. In December 2004, FOGL was awarded a 100% licence overan additional 50,000 sq kms adjacent to its existing licence areas. The 83,700sq km area held by FOGL is equivalent to 329 North Sea style blocks: as large asthe Southern Gas Basin and the Central Graben combined. www.fogl.co.uk This information is provided by RNS The company news service from the London Stock Exchange