FOGL.L Regulatory News (FOGL)

22 Dec 2005 13:36

Falkland Oil and Gas Limited22 December 2005 Thursday 22nd December 2005 Falkland Oil and Gas Limited("FOGL" or "the Company") The following replaces the interim results released today at 10:30am under RNSNumber: 0888W which contained errors in the financial statements. Interim results for the period ended 30 September 2005 Management Changes FOGL, the oil and gas exploration company operating in the undrilled South andEast Falkland Basins, announces its unaudited interim results for the 6 monthsended 30 September 2005. Highlights • 2D seismic survey is proceeding well with 20,000 km completed of the 24,500km planned • Technical information continues to provide encouragement that the Company's licences could contain a new petroleum province • Technical and commercial information presentations to potential participants commenced in September; attended so far by a number of oil companies including majors • Stellar Energy Advisors appointed to manage the farm out project • Cash balance £16.5m at 30 November 2005 Management Changes • Richard Liddell appointed Non-Executive Chairman to succeed John Armstrong who steps down as Executive Chairman but will remain on the Board. • Process to recruit a UK-based CEO is well advanced, further announcement imminent Outlook • Complete 2D Seismic Survey - recording, processing and interpretation in first half 2006 • Introduce new participants by farm out in first half 2006 • First exploration well targeted for 2007 John Armstrong, Executive Chairman of FOGL, said: "While we continue to progress our second 2D seismic survey, which will take thetotal seismic acquired to about 24,500 km, we are also seeking to attract thirdparty participants (i.e. farminees) to the project. The scale of the opportunityis such that we believe that the route to maximise shareholder value is throughthe involvement of other companies. We have begun to speak with a number ofcompanies, including majors, and we are targeting the first farm in as soon asis possible in the New Year. We have steadily strengthened the management team at FOGL in line with thegrowing potential of our licences and we feel that the Company now needs a fulltime chief executive and a UK-based chairman. As such, I will be standing downas Chairman and will be succeeded by Richard Liddell, a non-executive directorsince March 2005, as Non-Executive Chairman. The search for a UK based chiefexecutive is well advanced and we expect to make an announcement on this in thevery near future. All the indications are that oil and gas is present in our licences, and thatthe leads are big enough to hold very large volumes. The key question now iswhether oil and gas is present in sufficient quantities to be commercial.Whilst the technical evidence is encouraging, commerciality can only bedetermined by drilling and 2007 remains our target for the first well." Enquiries: FOGL David Hudd, Deputy Chairman 07771 893 267 College Hill Ben Brewerton / Nick Elwes 020 7457 2020 www.fogl.com Interim Statement Current Activity Having completed the analysis of the 9,450 km 2D seismic survey undertakenearlier this year, FOGL began a new 15,000 km 2D seismic survey in June; 10,054km have been completed to date. The new survey will cover all 130 leadspreviously identified but with particular emphasis on the 50 most promising toenable FOGL to locate drillable prospects. To achieve this, the new lines willbe closely spaced in some areas to enable detailed mapping of the prospects.The company anticipates that the survey will be completed, processed andinterpreted in the first half of 2006. Technical information continues toprovide encouragement that oil and gas could be present and that the Company'slicences could contain a new petroleum province. In May, after announcing the preliminary results of its 9,450 km 2D seismicsurvey, FOGL received a number of enquiries from large oil companies regardingthe possibility of participation in the project. Several areas for farm outhave been delineated and an information presentation room (data room) was openedin our Wigmore Street office in September this year. In view of the high level of oil industry interest, Stellar Energy Advisors, afirm specialising in brokering farm out deals, has been retained to expedite thefarm out programme. The objective is to secure partners with the appropriatefinancial capability and deepwater experience with FOGL retaining sufficientequity to provide significant success case value for the shareholders. Management Changes The management team has been significantly strengthened since the IPO and theappointment of a Chief Executive and a UK based Chairman will position thecompany for the next stage of its development. Richard Liddell, who joined the Board as a non-executive Director in March, willbecome Non-Executive Chairman on 1 January 2006, succeeding John Armstrong, thefounding Chairman of the company who has served as Executive Chairman sinceflotation. Richard has twenty-six years experience in the oil and gas industryand was Operations Director of Premier Oil plc from 1999 until 2003. Prior tothat, he spent two years as Director of Development at BG Exploration andProduction. He previously held a number of positions during an eighteen-yearspell at Philips Petroleum Company. John Armstrong has decided to step down as Executive Chairman at the end of thisyear having been involved with project since its inception three years ago. Johnis based in Australia and, with the project now larger than originallyenvisaged, he proposed to the Board that he stand down as Chairman when itbecame clear that the Company needed a full time CEO based in the UK. John willremain on the Board as a non-executive director and he will continue to beclosely involved in the Company's relationship with the Falkland Islands'Government The process of recruiting a full time chief executive is well advanced and weexpect to be able to make a further announcement in the coming weeks. In theinterim, Richard Liddell will act as Executive Chairman. The changes announced today are in addition to the appointment in April ofPatrick Bird as Exploration Manager. Outlook The clear objective for FOGL is to define and prioritise prospects for drilling.The current programme is to complete and evaluate the 15,000 km 2D seismicsurvey now in progress and then to consider further technical work including 3Dseismic and sea bed logging. The Company's goal is to develop a multi-welldrilling programme, targeting drilling in 2007. Contact with oil companies about farming into FOGL's licences will continue andwe anticipate further progress on this in the New Year. Unaudited Profit and Loss Account for 6 months ended 30 September 2005 Unaudited Audited 6 months 10 month Note ended period ended 30 September 31 March 2005 2005 £ £ Administrative expenses (640,107) (460,133) Operating Loss (640,107) (460,133) Interest income 361,163 166,441 Loss on ordinary activities before taxation (278,944) (293,692) Tax on loss on ordinary activities - - Loss on ordinary activities after taxation (278,944) (293,692) Loss for the period (278,944) (293,692) Loss per ordinary share - Basic and diluted 2 (0.32p) (0.48p) There were no recognised gains or losses in the current or prior period otherthan those dealt with in the profit and loss account above. The operating loss for the current and prior period arose from continuingoperations. Unaudited Balance Sheet at 30 September 2005 Unaudited at Audited at 30 September 31 March 2005 2005 £ £ £ £ NoteFixed assetsIntangible fixed assets 4,823,615 2,866,836Tangible fixed assets 68,097 11,277 4,891,712 2,878,113 Current assetsDebtors 451,627 75,434 Cash at bank and in hand 17,585,232 11,079,976 18,036,859 11,155,410 Creditors: amounts fallingdue within one year (112,409) (656,844) Net current assets 17,924,450 10,498,566 Net assets 22,816,162 13,376,679 Capital and reservesCalled up share capital 4 1,835 1,600Share premium account 4 23,386,963 13,668,771Profit and loss account 4 (572,636) (293,692) Shareholders' equity funds 22,816,162 13,376,679 Unaudited Cash Flow Statement for the 6 months ended 30 September 2005 Unaudited Audited 6 months ended 10 month period ended 30 September 31 March 2005 2005 £ £ Net cash (outflow) / inflow from operating activities (1,550,860) 122,302Returns on investments and servicing of financeInterest received 361,163 166,441Capital expenditure and financial investmentExpenditure in respect of intangible fixed assets (1,956,779) (2,866,836)Expenditure in respect of tangible fixed assets (66,695) (12,302) Cash outflow before financing (3,213,171) (2,590,395) FinancingIssue of ordinary share capital 10,000,000 14,697,514Issue costs (281,573) (1,027,143) 9,718,427 13,670,371Increase in cash in the period 6,505,256 11,079,976 Reconciliation of operating loss to net cash outflow from operating activitiesOperating loss (640,107) (460,133)Depreciation 9,875 1,025Increase in debtors (376,193) (75,434)(Decrease) / increase in creditors (544,435) 656,844 Net cash (outflow) / inflow from operating activities (1,550,860) 122,302 Reconciliation of movements in shareholders' funds For the 6 months ended 30 September 2005 Unaudited Audited 6 months ended 10 month period ended 30 September 31 March 2005 2005 £ £ Loss for the financial period (278,944) (293,692) New share capital subscribed (net of issue costs) 9,718,427 13,670,371 Net addition to shareholders' equity funds 9,439,483 13,376,679 Opening shareholders' equity funds 13,376,679 - Closing shareholders' equity funds 22,816,162 13,376,679 Notes to the interim results 1. Basis of financial information The interim financial information in this announcement has been prepared on thesame basis and using the same accounting policies as were applied in drawing upthe Company's statutory financial statements for the 10 month period ended 31March 2005. The financial information for 6 months ended 30 September 2005 is unaudited. Inthe opinion of the directors the financial information for this period fairlypresents the financial position, results of operations and cash flows for theperiod in compliance with Falkland Island Company law and generally acceptedaccounting principles. The financial information for the 10 month period ended 31 March 2005 has beenderived from the Company's audited financial statements for the period as filedwith the Registrar of Companies and does not constitute the statutory financialstatements for that period. The auditor's report on the statutory financial statements for the 10 monthperiod ended 31 March 2005 was unqualified. 2. Loss per share The calculation of basic loss per ordinary share is based on a loss of £278,944(10 month period ended 31 March 2005: loss £293,692) and on 87,843,137 ordinaryshares (10 month period ended31 March 2005: 61,510,000 ordinary shares), being the weighted average number ofordinary shares in issue during the period. There is no difference between thediluted loss per share and the basic loss per share presented as the companyreported a loss for the period and, in accordance with Financial ReportingStandard Number 14, the share options in issue are not considered dilutive. 3. Dividends The directors do not recommend the payment of a dividend. 4. Capital and reserves Called up share Share premium Profit and loss Total capital account account £ £ £ £ At 1 April 2005 1,600 13,668,771 (293,692) 13,376,679 Issue of shares 235 9,999,765 - 10,000,000 Loss for the period - - (278,944) (278,944) Expenses of share issue - (281,573) - (281,573) At 30 September 2005 1,835 23,386,963 (572,636) 22,816,162 This information is provided by RNS The company news service from the London Stock Exchange