NAUT.L Regulatory News (NAUT)

19 Sep 2007 07:02

Global Energy Development PLC19 September 2007 For Immediate Release 19 September 2007 GLOBAL ENERGY DEVELOPMENT PLC ("Global" or the "Company") UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 Global Energy Development PLC, the Latin America focused petroleum explorationand production company (LSE-AIM: "GED"), announces unaudited interim results forthe six months ended 30 June 2007. Financial Highlights: • Turnover up 21.6% to $10,954,000 (six months ended 30 June 2006: $9,006,000); • Gross profit up 55.7% to $5,611,000 (six months ended 30 June 2006 (restated*): $3,603,000) despite industry costs rising in general; • Profit on ordinary activities before tax up 119.3% to $2,333,000 (six months ended 30 June 2006 (restated*): $1,064,000); • Average cash netback per barrel of $20.49 (six months ended 30 June 2006 (restated*): $23.13); • Capital expenditure of $10,310,000, predominately related to delineation drilling on the Colombian Luna Llena contract during the period; and • Gross production up 22.6% at 242,693 barrels of oil ("bbls") (six months ended 30 June 2006: 197,960 bbls). * These interim results are the Company's first results to be reported inaccordance with International Financial Reporting Standards ("IFRS") and thecomparative financial information for the six months ended 30 June 2006, and theyear ended 31 December 2006, has been restated accordingly. The percentagesgiven within this announcement are calculated using the restated financialinformation for the six months ended 30 June 2006, and the year ended 31December 2006. For further information: Global Energy Development PLC +44 (0) 20 7763 7177Catherine Miles, Company Secretary +44 (0) 79 0991 8034www.globalenergyplc.com Notes to Editors: The Company's shares have been traded on AIM, a market operated by the LondonStock Exchange, since March 2002 (LSE-AIM: 'GED'). The Company's balancedportfolio covers the countries of Colombia, Peru and Panama and comprises a baseof production, developmental drilling and workover opportunities and severalhigh-potential exploration projects. Ryder Scott Company, LP ("Ryder Scott"), the independent petroleum consultancyfirm, reported that as at 31 December 2006, proved reserves net to the Companytotalled 5.5 million barrels of oil equivalent ("mmboe"), proved plus probable('2P') reserves net to the Company totalled 19.4 mmboe and proved plus probableplus possible ('3P') reserves net to the Company totalled 81.8 mmboe. Proven and probable oil and gas reserves are estimated quantities ofcommercially producible hydrocarbons which the existing geological, geophysicaland engineering data show to be recoverable in future years from knownreservoirs. The proved reserves reported by Ryder Scott conform to thedefinition approved by the Society of Petroleum Engineers ("SPE") and the WorldPetroleum Congress ("WPC"). The probable and possible reserves reported byRyder Scott conform to definitions of probable and possible reserves approved bythe SPE/WPC using the deterministic methodology. The information contained within this announcement has been reviewed by RyderScott. These interim financial statements do not constitute statutory accounts withinthe meaning of section 240 of the Companies Act 1985. The comparative figuresfor the financial year ended 31 December 2006 are not the Company's fullstatutory accounts for that year. A copy of the statutory accounts for thatyear has been delivered to the Registrar of Companies. The auditors' report onthose accounts was unqualified, did not include references to any matters towhich the auditors drew attention by way of emphasis without qualifying theirreport and did not contain statements under the Companies Act 1985, s237(2) or(3). The comparative figures for the financial year ended 31 December 2006 havebeen abridged from the Group's statutory accounts for that financial year,translated from United Kingdom Generally Accepted Accounting Principles (UKGAAP) to IFRS. The UK GAAP version of those accounts have been reported on bythe Group's auditors and delivered to the Registrar of Companies. Chairman and Managing Director's Statement Financials These interim results are the Company's first results to be prepared using therecognition of measurement principles of International Financial ReportingStandards ("IFRS") and the financial statements for the year ended 31 December2007 will be the Company's first to be reported in accordance with IFRS. Thecomparative financial information for the six months ended 30 June 2006 and theyear ended 31 December 2006 has been restated accordingly. The impact ofadopting IFRS is disclosed within the Notes to the Financial Information sectionof this announcement and additional information is also available on theCompany's website at www.globalenergyplc.com. Turnover for the six months ended 30 June 2007 was $10,954,000, an increase of21.6% against the same period in the prior year (six months ended 30 June 2006:$9,006,000). This was despite a slightly lower average oil price during theperiod and due to increased production volumes. There was a marginal reductionin cost of sales during the period despite industry costs in general continuingto rise with cost of sales totalling $5,343,000 (six months ended 30 June 2006(restated): $5,403,000). As a consequence, gross profit for the six months ended30 June 2007 increased by 55.7% to $5,611,000 (six months ended 30 June 2006(restated): $3,603,000). General and administrative costs were higher at$3,057,000 (six months ended 30 June 2006 (restated): $2,678,000). However, aspreviously stated, during the period the Company took measures to reduce generaland administrative costs, mostly in the area of reducing non-core personnel.Profit before tax increased by 119.3% to $2,333,000 (six months ended 30 June2006 (restated): $1,064,000). Gross production for the six months ended 30 June 2007 totalled 242,693 barrelsof oil ("bbls") (six months ended 30 June 2006: 197,960 bbls) with sales, net tothe Company, of 210,369 bbls (six months ended 30 June 2006: 171,444 bbls). TheCompany's net sales were 86.7% of gross production highlighting the highlycompetitive production-based royalties in Colombia, especially under the currentcontract model. The average price for West Texas Intermediate ("WTI") crude oil during the sixmonths ended 30 June 2007 was $61.59 against $67.02 during the same period inthe prior year and the Company averaged a cash netback per barrel of oil of$20.49 and $23.13 respectively during the periods. Net cash inflow from operating activities for the six months ended 30 June 2007was $6,048,000 (six months ended 30 June 2006 (restated): $4,270,000). This$6,048,000 together with available cash funded capital expenditure of$10,310,000 during the six months ended 30 June 2007 (six months ended 30 June2006 (restated): $10,219,000). The capital expenditure was predominatelyfocused on the Colombian Luna Llena contract where delineation drillingactivities occurred during the period. Partnering and Operations During the first half of 2007 the Company began undertaking commercialdiscussions with potential partners for several of its projects to accelerateits drilling programme and to aid in the effort of contracting the necessaryservice equipment. The management believes that by bringing in partners acrossits broad portfolio of development, exploitation and exploration projects it cansignificantly increase activity rates and realise the potential of these highlypromising projects in a much shorter timeframe. Certain discussions are nowadvanced covering several different projects. The Company signed a further contract during the first half of 2007, thePanamanian Garachine contract, the first operations contract signed by TheMinistry of Commerce and Industry for the Republic of Panama since 1990. Themanagement believe the area to have substantial exploration potential due tohaving held the area previously under a Technical Evaluation Agreement andhaving evaluated it for several years before signing the contract. The Company is currently producing from five Colombian contracts and the declinerate for this production during the first half of 2007 was only approximately3%, around half of what was anticipated and substantially due to the continuingstrong production performance of the Tilodiran 2 well within the Rio Verdecontract. During the first half of 2007 the Company undertook a delineation drillingprogramme on the previously non-producing Colombian Luna Llena contract whichproduced a positive test result from the second well. The Company is currentlyfinalising its plans for this contract area whilst the rainy season prohibitsfurther operations in the area. Recent Corporate Activity The Company announced on 13 September 2007 that it had received severalunsolicited expressions of interest from separate parties which may or may notlead to an offer or offers being made for the Company. The announcement was madeas a result of the number of unsolicited approaches made, in accordance withRule 2.2(e) of The City Code on Takeovers and Mergers. The Board of the Company is currently evaluating these expressions of interest,which have mostly arisen out of the previously mentioned commercial discussionsthe Company has been conducting over recent months with potential partners forits projects. Further announcements in respect of any potential offer will bemade by the Company in due course. Mikel Faulkner Executive Chairman Stephen Voss Managing Director 19 September 2007 UNAUDITED FINANCIAL HIGHLIGHTS for the six months ended 30 June 2007 (Figures in thousands except for per share information) Six Months Six Months Twelve Months Ending Ending 30 June Ending 30 June 2007 2006 31 December 2006 $000 $000 $000 Turnover 10,954 9,006 21,053Expenditures on capital assets (restated) 10,310 10,219 15,431Net current assets (restated) 4,285 3,904 9,797Capital and Reserves (restated) 76,694 71,554 74,932 Basic earnings per share (restated) $0.04 $0.02 $0.08Diluted Earnings per share (restated) $0.04 $0.01 $0.07 Weighted average ordinary shares outstandingBasic 35,328,428 35,286,527 35,304,403Diluted 39,893,455 41,475,589 39,869,430 Reserve information - as of 31 December 2006 (1) Quantity Future NPV (MBOE) Net Revenue At 10% Thousands $000 $000Proved 5,540 186,994 127,962Probable 13,870 510,953 299,008Total 19,410 697,947 426,970 Note (1): The reserve information for Global Energy Development PLC has been certified bya third-party firm, Ryder Scott Company, LP, at 31 December 2006. Independent Review Report to the Board of Directors of Global Energy DevelopmentPLC on the Financial Information for the Six Months Ended 30 June 2007 Introduction We have been instructed by the Company to review the financial information forthe six months ended 30 June 2007 on pages 7 to 12. We have read the otherinformation contained in the interim report and considered whether it containsany apparent misstatements or material inconsistencies with the financialinformation. Our report has been prepared in accordance with the terms of our engagement toassist the company in meeting the requirements of the rules of the London StockExchange for companies trading securities on the AIM Market of the London StockExchange and for no other purpose. No person is entitled to rely on this reportunless such a person is a person entitled to rely upon this report by virtue ofand for the purpose of our terms of engagement or has been expressly authorisedto do so by our prior written consent. Save as above, we do not acceptresponsibility for this report to any other person or for any other purpose andwe hereby expressly disclaim any and all such liability. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directorsare responsible for preparing the interim report in accordance with the rules ofthe London Stock Exchange for companies trading securities on the AIM Market ofthe London Stock Exchange which require that the half-yearly report be presentedand prepared in a form consistent with that which will be adopted in thecompany's annual accounts having regard to the accounting standards applicableto such annual accounts. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of management and applying analyticalprocedures to the financial information and underlying financial data and basedthereon, assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with International Standards on Auditing (UK and Ireland) andtherefore provides a lower level of assurance than an audit. Accordingly we donot express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. BDO STOY HAYWARD LLPChartered AccountantsLondon19 September 2007 UNAUDITED CONSOLIDATED INCOME STATEMENTfor the six months ended 30 June 2007 Six Months (Restated) (Restated) Ending Six Months Twelve Months 30 June 2007 Ending Ending $000 30 June 2006 31 December 2006 $000 $000Turnover 10,954 9,006 21,053 Cost of Sales (5,343) (5,403) (10,697)Gross profit 5,611 3,603 10,356 Other income 61 247 200 Administrative Costs (3,057) (2,678) (6,131) Finance Income 101 (108) 152 Finance Expense (383) - (610)Profit before taxation 2,333 1,064 3,967 Income tax expense (796) (483) (984)Profit for the period attributable to the 1,537 581 2,983equity holders of the parent Earnings per ordinary share - Basic $0.04 $0.02 $0.08 - Diluted $0.04 $0.01 $0.08 UNAUDITED CONSOLIDATED BALANCE SHEETas at 30 June 2007 Six Months (Restated) (Restated) Ending Six Months Twelve Months 30 June 2007 Ending Ending $000 30 June 2006 31 December 2006 $000 $000Assets Non-current assets Intangible Assets 19,272 9,801 10,901Property, plant and equipment 69,460 68,931 70,334Total non-current assets 88,732 78,732 81,235 Current Assets Inventories 1,142 706 996Trade and other receivables 4,691 3,538 4,681Short-term investments 1,010 868 893Cash & cash equivalents 2,934 2,180 6,955Total current assets 9,777 7,292 13,525Total assets 98,509 86,024 94,760 Current liabilities Trade and other payables (5,492) (3,388) (3,728)Total current liabilities (5,492) (3,388) (3,728) Non-current liabilities Convertible loan notes (15,616) (10,482) (15,425)Long term provisions (649) (600) (625)Trade and other payables (58) - (50)Total non-current liabilities (16,323) (11,082) (16,100)Total liabilities (21,815) (14,470) (19,828) Total net assets 76,694 71,554 74,932 Equity Called up share capital 539 538 539Share premium account 26,439 26,287 26,439Other reserve 1,826 1,314 1,826Capital reserve 210,844 210,844 210,844Retained earnings (162,954) (167,429) (164,716)Total Equity 76,694 71,554 74,932 UNAUDITED CONSOLIDATED CASH FLOW STATEMENTfor the six months ended 30 June 2007 Six Months (Restated) (Restated) Ending Six Months Twelve Months 30 June 2007 Ending Ending $000 30 June 2006 31 December 2006 $000 $000Operating Activities Profit before taxation 2,333 1,064 3,967 Depreciation, depletion and amortisation 2,309 1,947 4,342 (Increase)/decrease in trade and other -10 2,159 1,016receivables Increase/(decrease) in trade and other 1,764 -384 6payables Increase in inventories -146 -53 -343 Finance income -101 - -152 Accretion expense on convertible notes 88 - 180 Other non-cash items -1 -88 -2 Stock options expense 225 - 312Cash generated from operations 6,461 4,645 9,326 Finance expense 383 108 430 Income taxes paid -796 -483 -985Net cash provided by operating activities 6,048 4,270 8,772 Investing activity Capital expenditure and financial investment Expenditure on tangible fixed assets -1,952 -10,219 -13,658 Expenditure on intangible fixed assets -8,358 - -1,464 Disposal of fixed assets 358 785 785 Increase in short-term deposits -117 -320 -345Net cash used in investing activities -10,069 -9,754 -14,682 Financing activities Issue of share capital - - - Convertible loan notes issued - - 5,201Net cash used in financing activities - - 5,201 (Decrease)/increase in cash and cash -4,021 -5,484 -709equivalentsCash at beginning of period 6,955 7,664 7,664Cash at end of period 2,934 2,180 6,955 UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the six months ended 30 June 2007 Share Capital Share (Restated) Other Total Capital Reserve Premium Retained Reserve $000 $000 $000 $000 Earnings $000 $000 At 1 January 2006 537 210,844 26,288 (168,010) 1,314 70,973Equity portion of convertible - - - - 512 512loan notes Changes in equity for 2006 537 210,844 26,288 (168,010) 1,826 71,485 Stock option expense - - - 312 - 312Profit for the period - - - 2,982 - 2,982Total recognized income and - - - 3,294 - 3,294expense for period Exercise of options 2 - 151 - - 153At 31 December 2006 539 210,844 26,439 (164,716) 1,826 74,932 Stock Option Expense - - - 225 - 225Profit for the period - - - 1,537 - 1,537Total recognized income and - - - 1,762 - 1,762expense for period At 30 June 2007 539 210,844 26,439 (162,954) 1,826 76,694 NOTES TO THE FINANCIAL INFORMATIONfor the six months ended 30 June 2007 1. ACCOUNTING POLICY Basis of Preparation: With effect from 1 January 2007 it became mandatory forthe Group to comply with International Financial Reporting Standards (IFRS). Thefinancial results of the Group for the six months ended 30 June 2007 have beenprepared on a basis which is consistent with International Financial ReportingStandards (IFRS) as adopted by the European Union which the Group expects toapply in the first annual accounts presented as at 31 December 2007. Comparativeinformation for 2006 has been restated under IFRS. The financial information presented in this report is unaudited. In the opinionof the directors, the financial information fairly represents the financialposition, results of operations and cash flows for the periods in conformitywith IFRS. Basis of Consolidation: The financial statements have been prepared using theprinciples of merger accounting and as permitted by IFRS 1, businesscombinations prior to the date of transition have not been restated. Undermerger accounting, the results of the Group are combined from the beginning ofthe financial period in which the combination occurred and their assets andliabilities combined at the amounts at which they were previously recorded. These interim financial statements do not constitute statutory accounts withinthe meaning of section 240 of the Companies Act 1985. The comparative figuresfor the financial year ended 31 December 2006 are not the Company's fullstatutory accounts for that year. A copy of the statutory accounts for thatyear has been delivered to the Registrar of Companies. The auditors' report onthose accounts was unqualified, did not include references to any matters towhich the auditors drew attention by way of emphasis without qualifying theirreport and did not contain statements under the Companies Act 1985, s237(2) or(3). The comparative figures for the financial year ended 31 December 2006 havebeen abridged from the Group's statutory accounts for that financial year,translated from United Kingdom Generally Accepted Accounting Principles (UKGAAP) to IFRS. The UK GAAP version of those accounts have been reported on bythe Group's auditors and delivered to the Registrar of Companies. A transition document detailing the impact of adopting IFRS is also available onthe Company's website at www.globalenergyplc.com. 2. Turnover is attributable to one continuing activity, which is oil production from the Harken de Colombia, Ltd. branch located in Colombia, South America. 3. The calculation of earnings per ordinary share for the six months ended 30 June 2007 is based on the weighted average number of ordinary shares of 35,328,428 (six months ended 30 June 2006: 35,286,527; year ended 31 December 2006: 35,304,403). The calculation of diluted earnings per share for the six months ended 30 June 2007 is based on the weighted average number of ordinary shares of 39,893,455 (six months ended 30 June 2006 41,475,589; year ended 31 December 2006: 39,869,430). The profit after tax used in the calculation is $1.537 million (six months ending 30 June 2006: $581,000; year ended 31 December 2006: $2.983 million). 4. No interim dividend has been declared. 5. Reconciliation of movement in cash to movement in net funds: At Cash Other At 1 January Flows Changes 30 June 2007 $000 $000 2007 $000 $000Cash at bank and in hand 6,955 (4,021) 2,934Debt due within one year - - - -Debt due after one year (15,425) - (191) (15,616)Short-term deposits 893 117 1,010Total (7,577) (3,904) (191) (11,672) This information is provided by RNS The company news service from the London Stock Exchange