Last checked at 29 Sep 2008 07:00
29 September 2007
GREEN DRAGON GAS LTD.
("Green Dragon" or "the Company")
Interim Results for the six months ended 30 June 2008
Green Dragon Gas Ltd (AIM: GDG), the Chinese coal bed methane business, today announces its unaudited interim results for the six months ended 30 June 2008.
Highlights:
Net assets of US$496 million, including cash of US$73 million, and a loss after tax of US$12.87 million (US$0.134 per share).
Raised US$36.8 million (net of expenses) in an equity placement to institutional investors at a price of US$7.98 per share in May 2008.
US$37 million of convertible debt was converted into equity in July 2008 reducing total long term debt by 39% to US$58 million. Public float increased to 17,896,159 shares or 16.9 % of total outstanding 105,896,445 shares after the conversion.
Acquired Pacific Asia Canada Energy, Inc (PACE) for CAD$32.4 million (closed in July 2008). Deal resulted in Green Dragon acquiring a sixth CBM block of 946 sq km with an estimated 5.2 TCF in gas-in-place. Additionally, PACE has a JV with Mitchell Drilling (Australian directional drilling specialist) with a ten year technology exclusivity period.
Acquired Giant Power International Investment Limited (GPI) for US$10.7 million. Deal closed in July 2008 providing two strategically located gas distribution centres off the West-East CNPC pipeline in Zhengzhou, Henan and Wuhu, Anhui Province
Acquired Zhengzhou Nanhai Gas Ltd (ZNG), Zhengzhou Clean Petro-Equipment Ltd (ZCP), and Zhengzhou Clean Technology Ltd (ZCT) for US$9.25 million in August 2008. The acquisition of these three profitable businesses, synergistically located in Zhengzhou in close proximity to the Company's CBM producing Shizhuang South block, is a realisation of the Company's vertically integrated strategy .
Commenting on the results, Randeep S. Grewal, Chairman and Chief Executive of Green Dragon, stated:
"17 August marked our two year anniversary since being admitted on AIM and the Company's focused growth continues at a steady pace. Green Dragon has been synergistically acquisitive through the first half of this year implementing its niche business strategy of being vertically integrated. At our Shizhuang South block, one can see rig drilling, wells producing and trucks loading for transportation to a CNG station which sells to the end consumer - all within the Company's operations. Our strategy and vision has been realised at the Shizhuang South block and we are committed to implementing this strategy at the additional five blocks as they are brought on stream over time."
"We look forward to the growth in Group revenues as each of our operating divisions systematically grows into a profit centre and I would like to thank the hard working employees who have been the cornerstone in successfully implementing the niche strategy and vision. We have almost 7,566 sq km of license area with gas-in-place estimates in excess of 20TCF, drilling rigs, CNG gas stations and technology complemented by almost 500 employees committed to a common cause - making Green Dragon a vertically integrated gas supplier providing optimum shareholder returns through the execution of an environmentally progressive niche business plan in China."
For further information on the Company and its activities, please refer to the website at www.greendragongas.com or contact:
| Randeep S. Grewal / Betty Cheung : Green Dragon Gas | +852 3710 0168 |
| | |
| Dr Azhic Basirov/ David Jones : Nominated Adviser & Broker /Smith & Williamson Corporate Finance Limited | +44 20 7131 4000 |
| | |
| Tim Redfern : Nominated Broker / Evolution Securities | +44 20 7071 4300 |
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| Tim Thompson / Ben Romney / Christian Goodbody : Investor Relations / Buchanan Communications | +44 20 7466 5000 |
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CHAIRMANS STATEMENT
17 August marked our two year anniversary since being admitted on AIM and the Company's focused growth continues at a steady pace. Green Dragon has been synergistically acquisitive through the first half of this year implementing its niche business strategy to be vertically integrated. At our Shizhuang South block, one can see a rig drilling, wells producing and trucks loading for transportation to a CNG station which sells to the end consumer - all within the Company's operations. Our strategy and vision has been realised on the Shizhuang South block. The Shizhuang South block is located in southern Shanxi province and 220 km from the metropolitan capital city Zhengzhou in Henan province with 4.3 million people. Zhengzhou has been our strategic market for the Shizhuang South and Shizhuang North blocks and thus the focused acquisitions to establish our market. We are committed to execute similarly as the additional five blocks are brought on stream over time.
The company continues its expansion within each of its focused areas:
Technical Services. Greka Technical Services (GTS) graduated its first class of 80 employees following three weeks of rigorous training and spud its first two wells at the Shizhuang South block. The company received all five of its latest technology new US manufactured CBM rigs and has inducted the first two into the drilling operation. We expect that all five of the rigs will be in a continuous drilling programme over the next six months that will continue for the next decade across our six blocks. Of the two rigs within the Greka-Mitchell JV, one is under a continuous drilling programme at Shizhuang South while the second will be mobilised by year end.
Upstream. The Company continues its 2008 drilling program across all the six blocks encompassing 7,566 sq km and gas in place estimates in excess of 20TCF. The Shizhuang South block is the area of concentration for this year with a significant increase in the inseam horizontal wells over the number originally planned. The PACE acquisition provided us access to the Dymaxion technology which has demonstrated to be a catalyst in expediting the CBM development. Following the successful drilling in Shizhuang South, the technology will be applied in our Fengcheng block in Jiangxi later this year to test its capability. Across all blocks, the de-watering continues in each of the pilot operations.
Midstream. The Giant Power International acquisition established us within the midstream sector strategically in Zhengzhou, Henan and Wuhu, Anhui. Both the distribution centres have long term contracts to supply off the CNPC west-east pipeline and a sales market that far exceeds the supply. Zhengzhou has been operating since mid 2005 while Wuhu has been online since mid 2008. Both distribution centres are profitable and accretive to the Company's earnings potential. Additionally, we are evaluating the viability of establishing our own transportation fleet for CBM deliveries between the upstream production blocks and downstream retail stations.
Downstream. The Zhengzhou Nanhai acquisition provided the Company with four CNG retail station locations strategically located in our focused markets. The operating Zhengzhou city station will be complemented by one each at the Zhengzhou airport, Xinzheng and Jiyuan through mid next year. Each of these stations is located within the 300 km trucking radii from the Shizhuang South block with a planned capacity of 10,000 m3 per day, initially. The capacities are modular and can be expanded. The well established Beijing Huayou joint venture in Beijing continues to increase its gas deliveries through its exclusive pipeline infrastructure within the Beijing Development Area ("BDA"). We expect the conclusion of the Olympics will allow for the continued industrial development within the BDA and hence gas sale increases thereafter.
Technology & Manufacturing. Our information systems team continues its focus on developing a proprietary Supervisory and Control Data Acquisition (SCADA) system for the Company's vast operations. The Company is committed to technology as a means to implement a central Operations Control Centre in Zhengzhou to monitor and manage all its field operations across upstream, midstream and downstream. The team expects to have its first prototype operational by yearend for a pilot implementation in Shizhuang South and the CNG retail station in Zhengzhou. The continued expansion of the gas industry provides an ideal environment for the increase in sales for our CNG dispensers which are currently being manufactured by us. The dispensers are the ultimate sales point for the gas industry within the transportation sector and provides the company with hands on knowledge of actual demand within this lucrative niche.
We look forward to the growth in Group revenues as each of our operating divisions systematically grow into profit centres and I would like to thank the hard working employees who have been the cornerstone in successfully implementing the niche strategy and vision. We have almost 7,566 sq km of license area with gas-in-place estimates in excess of 20TCF, drilling rigs, CNG gas stations and technology complemented with almost 500 employees committed to a common cause - making Green Dragon a vertically integrated gas supplier providing optimum shareholder returns through the execution of an environmentally progressive niche business plan in China.
I look forward to providing further updates to Shareholders, demonstrating Green Dragon's rapidly expanding inner China focused gas business.
Randeep S. Grewal
Chairman & CEO
26 September 2008 Condensed Consolidated Income Statement
Six months ended 30 June 2008
| Notes | Six months ended 30 June 2008 | Six months ended 30 June 2007 | Year ended 31 December 2007 | |
| US$'000 | US$'000 | US$'000 | ||
| unaudited | unaudited | audited | ||
| Revenue | 2 | 2,379 | - | - |
| Cost of sales | (2,319) | - | - | |
| --------- | --------- | --------- | ||
| Gross profit | 60 | - | - | |
| Distribution costs | (81) | - | - | |
| Share-based payments expense | 3 | (3,821) | - | - |
| Other administrative expenses | (3,088) | (1,133) | (4,346) | |
| --------- | --------- | --------- | ||
| Loss from operations | (6,930) | (1,133) | (4,346) | |
| Finance income | 730 | 611 | 1,694 | |
| Finance costs | (6,787) | (1,050) | (6,345) | |
| --------- | --------- | --------- | ||
| Loss before income tax | (12,987) | (1,572) | (8,997) | |
| Income tax | 90 | 79 | 163 | |
| --------- | --------- | --------- | ||
| Loss for the period | (12,897) | (1,493) | (8,834) | |
| --------- | --------- | --------- | ||
| Attributable to: | ||||
| Equity holders of the parent | (12,865) | (1,493) | (8,834) | |
| Minority interests | (32) | - | - | |
| --------- | --------- | --------- | ||
| (12,897) | (1,493) | (8,834) | ||
| --------- | --------- | --------- | ||
| Basic and diluted Loss per share (US$) | 4 | (0.134) | (0.016) | (0.093) |
| --------- | --------- | --------- | ||
All amounts above relate to continued operations.
Condensed Consolidated Balance Sheet
At 30 June 2008
| Notes | As at 30 June 2008 | As at 30 June 2007 | As at 31 December 2007 | |
| US$'000 | US$'000 | US$'000 | ||
| unaudited | unaudited | audited | ||
| Assets | ||||
| Non-current assets | ||||
| Property, plant and equipment | 56,028 | 267 | 345 | |
| Gas exploration and appraisal assets | 6 | 606,337 | 595,878 | 599,261 |
| Available for sale investment | 429 | 27,122 | 27,122 | |
| Deferred tax asset | 609 | 384 | 486 | |
| Other financial assets | 12 | 5,383 | - | - |
| --------- | --------- | --------- | ||
| 668,786 | 623,651 | 627,214 | ||
| Current assets | ||||
| Trade and other receivables | 8 | 7,780 | 489 | 2,517 |
| Cash and cash equivalents | 72,940 | 65,021 | 54,330 | |
| --------- | --------- | --------- | ||
| 80,720 | 65,510 | 56,847 | ||
| --------- | --------- | --------- | ||
| Total Assets | 749,506 | 689,161 | 684,061 | |
| --------- | --------- | --------- | ||
| Liabilities | ||||
| Current Liabilities | ||||
| Trade and other payables | 9 | 18,386 | 29,886 | 7,021 |
| --------- | --------- | --------- | ||
| 18,386 | 29,886 | 7,021 | ||
| Non-current liabilities | ||||
| Convertible loan notes | 83,197 | 46,739 | 76,431 | |
| Deferred tax liability | 139,225 | 139,225 | 139,225 | |
| Other financial liability | 10 | 13,000 | 14,149 | 13,000 |
| Loan notes due to shareholder | - | 20,296 | - | |
| --------- | --------- | --------- | ||
| 235,422 | 220,409 | 228,656 | ||
| --------- | --------- | --------- | ||
| Total liabilities | 253,808 | 250,295 | 235,677 | |
| --------- | --------- | --------- | ||
| Total net assets | 495,698 | 438,866 | 448,384 | |
| --------- | --------- | --------- | ||
| Equity | ||||
| Share capital | 11 | 10 | 9 | 9 |
| Share premium | 477,525 | 440,737 | 440,737 | |
| Convertible note equity reserve | 20,831 | 3,794 | 20,831 | |
| Share based payments reserve | 3,821 | - | - | |
| Foreign exchange reserve | 294 | (76) | (254) | |
| Retained deficit | (25,804) | (5,598) | (12,939) | |
| --------- | --------- | --------- | ||
| Capital and reserves attributable to equity holders of the parent | 476,677 | 438,866 | 448,384 | |
| Minority interests | 19,021 | - | - | |
| --------- | --------- | --------- | ||
| Total Equity | 495,698 | 438,866 | 448,384 | |
| --------- | --------- | --------- |
Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2008
| Notes | Share capital | Share premium | Convertible note equity reserve | Share based payments reserve | Foreign exchange reserve | Retained deficit | Attributable to equity holders of the parent | Minority Interests | Total | ||
| US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | |||
| Balance At 1st January 2007 | 9 | 440,737 | - | - | (45) | (4,105) | 436,596 | - | 436,596 | ||
| --------- | --------- | --------- | --------- | --------- | --------- | ------- | ------- | ------- | |||
| Exchange differences on translation of financial statements of foreign operations | - | - | - | - | (31) | - | (31) | - | (31) | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Net expenses recognized directly in equity | - | - | - | - | (31) | - | (31) | - | (31) | ||
| Loss for the period | - | - | - | - | - | (1,493) | (1,493) | - | (1,493) | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Total recognized income and expenses for the period | - | - | - | - | (31) | (1,493) | (1,524) | - | (1,524) | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Recognition of equity component of convertible note | - | - | 3,794 | - | - | - | 3,794 | - | 3,794 | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Balance at 30th June 2007 (unaudited) | 9 | 440,737 | 3,794 | - | (76) | (5,598) | 438,866 | - | 438,866 | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Exchange differences on translation of financial statements of foreign operations | - | - | - | - | (178) | - | (178) | - | (178) | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Net expenses recognized directly in equity | - | - | - | - | (178) | - | (178) | - | (178) | ||
| Loss for the period | - | - | - | - | - | (7,341) | (7,341) | - | (7,341) | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Total recognized income and expenses for the period | - | - | - | - | (178) | (7,341) | (7,519) | - | (7,519) | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Recognition of equity component of convertible note | - | - | 21,605 | - | - | - | 21,605 | - | 21,605 | ||
| Convertible note issue costs | - | - | (4,568) | - | - | - | (4,568) | - | (4,568) | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Balance at 31 December 2007 (audited) | 9 | 440,737 | 20,831 | - | (254) | (12,939) | 448,384 | - | 448,384 | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Exchange differences on translation of financial statements of foreign operations | - | - | - | - | 548 | - | 548 | 23 | 571 | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Net expenses recognized directly in equity | - | - | - | - | 548 | - | 548 | 23 | 571 | ||
| Loss for the period | - | - | - | - | - | (12,865) | (12,865) | (32) | (12,897) | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Total recognized income and expenses for the period | - | - | - | - | 548 | (12,865) | (12,317) | (9) | (12,326) | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Placement of new shares (net of issue costs US$943,000) (USD943 | 11 | 1 | 36,788 | - | - | - | - | 36,789 | - | 36,789 | |
| Share-based payments | 3 | - | - | - | 3,821 | - | - | 3,821 | - | 3,821 | |
| Recognition of Jointly controlled entity | 7 | - | - | - | - | - | - | - | 19,030 | 19,030 | |
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
| Balance at 30 June 2008 (unaudited) | 10 | 477,525 | 20,831 | 3,821 | 294 | (25,804) | 476,677 | 19,021 | 495,698 | ||
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | |||
Condensed Consolidated Cash Flow Statement
Six months ended 30 June 2008
| Notes | Six months ended 30 June 2008 | Six months ended 30 June 2007 | Year ended 31 December 2007 | ||
| US$'000 | US$'000 | US$'000 | |||
| unaudited | unaudited | audited | |||
| Operating activities | |||||
| Loss before income tax | (12,987) | (1,572) | (8,997) | ||
| Adjustments for: | |||||
| Depreciation | 78 | - | 78 | ||
| Share based payments expense | 3 | 3,821 | - | - | |
| Finance income | (730) | (611) | (1,694) | ||
| Finance costs | 6,766 | 1,050 | 6,345 | ||
| Movements in exchange rates | 531 | (640) | (974) | ||
| --------- | --------- | --------- | |||
| Operating loss before changes in working capital and provisions | (2,521) | (1,773) | (5,242) | ||
| Increase in trade and other receivables | (4,483) | (9) | (825) | ||
| Increase in trade and other payables | 3,362 | 93 | 1,059 | ||
| --------- | --------- | --------- | |||
| Net cash used in operating activities | (3,642) | (1,689) | (5,008) | ||
| --------- | --------- | --------- | |||
| Investing activities | |||||
| Interest received | 730 | 611 | 1,694 | ||
| Payments for exploration activities | 6 | (7,076) | (2,751) | (4,883) | |
| Proceeds from disposal of property, plant and equipment | - | - | (1,150) | ||
| Purchases of property, plant and equipment | (2,102) | (181) | (377) | ||
| Cash held in jointly controlled entity at the date of acquisition | 7 | 704 | - | - | |
| Cash paid on acquisition of available for sale investment | - | - | (25,978) | ||
| Deposit paid in respect of acquisition of subsidiary | (5,383) | - | - | ||
| --------- | --------- | --------- | |||
| Net cash used in investing activities | (13,127) | (2,321) | (30,694) | ||
| --------- | --------- | --------- | |||
| Financing activities | |||||
| Repayments of borrowings | (1,410) | - | (20,785) | ||
| Convertible note issue costs paid | - | - | (3,214) | ||
| Proceeds on issue of convertible loan notes | - | 50,000 | 95,000 | ||
| Placement of new shares (net of issue costs US$943,000) | 11 | 36,789 | - | - | |
| --------- | --------- | --------- | |||
| Net cash from financing activities | 35,379 | 50,000 | 71,001 | ||
| --------- | --------- | --------- | |||
| Net increase in cash and cash equivalents | 18,610 | 45,990 | 35,299 | ||
| Cash and cash equivalents at beginning of period | 54,330 | 19,031 | 19,031 | ||
| --------- | --------- | --------- | |||
| Cash and cash equivalents at end of period | 72,940 | 65,021 | 54,330 | ||
| --------- | --------- | --------- | |||
Notes to Condensed Interim Financial Statements
1. Accounting policies
Basis of presentation
This unaudited condensed consolidated interim financial information has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively EU IFRSs). The principal accounting policies used in preparing the interim results are unchanged from those disclosed in the group's Annual Report for the year ended 31 December 2007 except for the adoption in the period of IAS 31 - Interests in Joint Ventures.
The condensed financial information for the six months ended 30 June 2008 and 30 June 2007 is unaudited and does not constitute statutory financial statements. The comparative financial information for the full year ended 31 December 2007 is not the Company's full statutory accounts for that period. The auditors' report on those accounts was unqualified and did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report.
2. Segmental analysis
The Group operates in one business segment, the exploration for, production and sale and distribution of gas. The Group has interests in one geographical segment being China.
3. Share based payments
On 28 February 2008, an aggregate of 9,451,341 share options at the exercise price of US$6.50 per share were granted to directors, executives and employees, pursuant to the Share Option Scheme approved by the Board in December 2007. The options granted, consist of five tranches, which vest over periods ranging from approximately 10 months to four years and 10 months periods and on exercise would represent 10% of the issued shares of the Company as follows:
| No. of options granted | Exercisable date | Percentage of grant |
| 945,134 | 1 January 2009 | 10% |
| 1,417,701 | 1 January 2010 | 15% |
| 1,890,268 | 1 January 2011 | 20% |
| 2,362,835 | 1 January 2012 | 25% |
| 2,835,403 | 1 January 2013 | 30% |
The share options do not confer any rights on the holders to dividends or to vote at shareholders' meetings. The fair value of the share options granted during the period was calculated using the Black-Scholes pricing model. The inputs into the model were as follows:
| Weighted average share price | US$6.04 |
| Weighted average exercise price | US$6.50 |
| Expected volatility | 38.95% |
| Risk free rate | 3.08% |
4. Loss per share
Loss per share is based on the loss attributable to ordinary equity holders of the Company of US$12,865,000 (2007: US$1,493,000).
Loss per ordinary share has been calculated using the weighted average number of shares in issue during the six month period to 30 June 2008 and 30 June 2007. The weighted average number of equity shares in issue for the periods are 95,682,512 and 94,513,413 respectively.
The diluted loss per share for both periods ended was not presented as the convertible notes and share options outstanding would result in a decrease in loss per share.
5. Dividend
The directors do not recommend the payment of an interim dividend. (2007: Nil)
6. Gas exploration and appraisal assets
|
| US$'000 |
| Cost | |
| At 1 January 2007 | 592,365 |
| Additions | 3,513 |
| --------- | |
| At 30 June 2007 | 595,878 |
| Additions | 3,383 |
| --------- | |
| At 31 December 2007 | 599,261 |
| Additions | 7,076 |
|
| --------- |
| At 30 June 2008 | 606,337 |
|
| --------- |
| Amortization | |
| At 1 January 2007 | - |
| Amortization for the period | - |
| --------- | |
| At 30 June 2007 | - |
| Amortization for the period | - |
| --------- | |
| At 31 December 2007 | - |
| Amortization for the period | - |
|
| --------- |
| At 30 June 2008 | - |
| --------- | |
| Net book value | |
| At 30 June 2007 (unaudited) | 595,878 |
| --------- | |
| At 31 December 2007 (audited) | 599,261 |
| --------- | |
| At 30 June 2008 (unaudited) | 606,337 |
| --------- |
7. Interest in Jointly Controlled Entity
On 23 November 2006, Greka Energy Limited, an indirectly wholly owned subsidiary of the Company entered into agreements to acquire 49% equity interest in Kesi Hengrun (Beijing) Technology Co. Ltd. ("KHBT") for a total consideration of approximately US$27,122,000. KHBT is a holding company, with its only significant asset being a 59% equity interest in Beijing Huayou United Gas Development Co., Ltd ("BJHY"), which is engaged in the supply of downstream gas distribution in Beijing, the PRC. The acquisition is viewed through the shell company of KHBT, the objective being to acquire an interest in BJHY. Until 11 June 2008, Mr. Randeep S. Grewal's position as a director of KHBT did not enable him, and therefore Greka Energy Limited, to exert joint control over the financial or operating policies of KHBT and therefore no control could be exercises over BJHY and therefore no control could be exerted over BJHY. The 49% equity interest was therefore treated in the financial statements as an available for sale investment.
On 11 June 2008, Mr. Randeep S. Grewal was appointed to the board as one of the directors of BJHY. At the point Greka Energy Limited is able to exercise joint control over the operations and financial policies of KHBT and BJHY. The interest in KHBT group is therefore recognised as an interest in a jointly controlled entity. The net assets and result of operations are accounted for in the consolidated financial statements using proportionate consolidation.
At the date of recognition, 11 June 2008, the Group's proportionate share of net assets, being the fair value, and the goodwill or discount on recognition arising, is as follows:
| Group's share of carrying amounts before combination | Fair value adjustments | Fair value | |
| US$'000 | US$'000 | US$'000 | |
| Property, plant and equipment | 11,383 | 42,276 | 53,659 |
| Available for sale investment | 422 | - | 422 |
| Cash and bank | 704 | - | 704 |
| Trade and other receivables | 780 | - | 780 |
| Trade and other payables | (8,003) | - | (8,003) |
| Short term loan | (1,410) | - | (1,410) |
| ---------- | ---------- | ---------- | |
| 3,876 | 42,276 | 46,152 | |
| Minority Interests | (19,030) | ||
| Goodwill (Discount) on recognition | - | ||
| ---------- | |||
| Satisfied by: Cash | 27,122 | ||
| ---------- |
| Cash outflow arising from the transaction | |||
| US$'000 | |||
| Cash consideration | 27,122 | ||
| Proportionate cash and bank balances acquired | (704) | ||
| ---------- | |||
| 26,418 | |||
| ---------- |
The jointly controlled entity recognised during the period contributed US$2,372,000 to the Group's turnover and a loss of US$78,000 to the Group loss before tax for the period between the date of recognition and the balance sheet date.
8. Trade and other receivables
| At 30 June 2008 | At 30 June 2007 | At 31 December 2007 | |
|
| US$'000 | US$'000 | US$'000 |
|
|
|
| |
| Trade receivables | 49 | 109 | 233 |
| Other financial assets | 6,371 | 380 | 1,150 |
| Other current assets | 1,360 | - | 1,134 |
|
| --------- | --------- | --------- |
|
| 7,780 | 489 | 2,517 |
|
| --------- | --------- | --------- |
9. Trade and other payables
| At 30 June 2008 | At 30 June 2007 | At 31 December 2007 | |
| US$'000 | US$'000 | US$'000 | |
|
|
| ||
| Trade payables | 7,022 | 3,908 | 5,540 |
| Other current liabilities | 11,364 | 25,978 | 1,321 |
| Amounts due to related parties | - | - | 160 |
|
| --------- | --------- | --------- |
|
| 18,386 | 29,886 | 7,021 |
|
| --------- | --------- | --------- |
10. Other financial liability
The amount payable represents amount payable to China United Coalbed Methane Co., Ltd. who are a party to the production sharing contracts, represents exploration costs incurred on the properties. These amounts are only payable from revenue on production from the Shizhuang South Property in China exclusively.
11. Share capital
| Authorised | Issued and fully paid | |||
| Number | Number | |||
| of shares | US$ | of shares | US$ | |
| At 1 January 2007 | ||||
| Ordinary shares of US$0.0001 each | 500,000,000 | 50,000 | 94,513,413 | 9,451 |
| --------- | --------- | --------- | --------- | |
| At 30 June 2007 | ||||
| Ordinary shares of US$0.0001 each | 500,000,000 | 50,000 | 94,513,413 | 9,451 |
| --------- | --------- | --------- | --------- | |
| At 31 Dec 2007 | ||||
| Ordinary shares of US$0.0001 each | 500,000,000 | 50,000 | 94,513,413 | 9,451 |
| --------- | --------- | --------- | --------- | |
| Placement of 4,728,356 new shares at US$7.98 each | - | - | 4,728,356 | 473 |
| --------- | --------- | --------- | --------- | |
| At 30 June 2008 | 500,000,000 | 50,000 | 99,241,769 | 9,924 |
| --------- | --------- | --------- | --------- | |
On 16 May 2008, the Company completed the placement of 4,728,356 shares to institutional investors at US$7.98, representing a discount of 6.1% to the closing price of US$8.50 on the placement date. The net proceeds from the placement of US$36,789,000 will be used for the purpose of future capital expenditure.
12. Events after balance sheet date
In March 2008, the Group, through its wholly owned subsidiary, Greka China Ltd. ("Greka China") entered into a conditional agreement to acquire Pacific Asia China Energy Inc. ("PACE"). PACE is a Vancouver listed public company. The transaction was closed on 10 July 2008. Greka China acquired all of PACE's outstanding shares at a price of Canadian Dollar (CAD) $0.35 per share. The consideration for the transaction was approximately CAD$32.4 million and was settled in cash.
In June 2008, the Group, through its wholly owned subsidiary, Greka SNU Ltd, entered into a share purchase agreement with Sinoenergy Holding Limited and paid a 50% deposit, totaling US$5,383,000 to acquire 100% of Giant Power International Investment Ltd (GPI) for US$10,680,000 in cash. GPI directly controls 35% of the equity shares of Zhengzhou PetroChina Hengran Petro-Gas Company Limited (ZPH) and 26.2% of the equity shares of Anhui PetroChina Hengran Petro-Gas Company Limited (APH). ZPH also owns 69.7% of APH. The transaction was closed on 3 July 2008.
On 3 July 2008, pursuant to a conversion request from a convertible note holder, arising from the exercise of US$37 million convertible notes issued by the Company, the Company issues 6,654,676 new ordinary shares.
On 6 August 2008, the Company completed the acquisition of a 100% interest in each of Zhengzhou Nanhai Gas Ltd., Zhengzhou Clean Petro-Equipment Ltd. and Zhengzhou Clean Technology Ltd. The total consideration for these three acquisitions was US$9.25 million paid in cash.