PTR.L Regulatory News (PTR)

23 Oct 2006 07:01

Petroneft Resources PLC23 October 2006 PetroNeft Resources plc Interim Results for the six month period ended 30 June 2006 PetroNeft Resources plc ('PetroNeft' or 'the Company'), owner and operator ofLicence 61, Tomsk Oblast, Russian Federation is pleased to report its half yearresults for the six month period ended 30 June 2006. This is the firstcommunication to shareholders as a publicly traded company. Highlights • Completion of project to reprocess and reinterpret all previous 2D seismic (2,654 line kms) and well log (14 wells) data. • Acquisition and interpretation of 515 line kms of new high resolution 2D seismic data. • Revised Competent Persons' Report by Ryder Scott establishes Proved and Probable (P1 + P2) reserves at 33.5 million bbls in two know oil fields, Lineynoye and Tungolskoye. • Possible (P3) reserves estimated by Ryder Scott at 290 million bbls in 20 prospects. • All drilling and seismic contracts in place for 2006/2007 winter season. Three wells will be drilled, one delineation well each on the existing oil fields and one exploration well on the high potential West Lineynoye Prospect. • Successfully raised US$ 23.5 million by way of two private placings. • Admission to AIM and IEX Markets completed on 27 September 2006. Dennis Francis, Chief Executive Officer of PetroNeft Resources plc commented: 'Operationally it has been a busy year with many significant accomplishmentshighlighted by the Company's admission to the AIM and IEX Markets. We aredelighted to have received such positive backing from the capital markets forour oversubscribed equity fundraising. These funds will be used to execute athree well operational programme designed to prove up our reserves base and takethe first step towards production. Tomsk Oblast is a world class petroleum province, with high quality localpersonnel and infrastructure in place on the ground. We firmly believe that ourunique combination of experienced international management, top quality localoperational staff and supportive shareholders provides us with a strong base fora successful future.' For further information, contact: Dennis Francis, CEO, PetroNeft Resources plc+1 713 988 2500 Desmond Burke, Director Investor Relations, PetroNeft Resources plc+353 52 53226 John Frain/Brian Garrahy, Davy+353 1 679 6363 Nick Elwes/Paddy Blewer, College Hill+44 207 457 2020 The information contained in this announcement has been reviewed and verified byMr. Dennis Francis, Director and Chief Executive Officer of PetroNeft, for thepurposes of the Guidance Note for Mining, Oil and Gas Companies issued by theLondon Stock Exchange in March 2006. Mr. Francis holds a B.S. Degree inGeophysical Engineering and a M.S. Degree in Geology from the Colorado School ofMines. He has also graduated from the Harvard University Program for ManagementDevelopment. He is a member of the American Association of Petroleum Geologistsand the Society of Exploration Geophysicists. Chairman's Statement It has been 18 months since the concept of PetroNeft Resources plc was developedand started to become a reality. Now the company is fully structured and fundedfor the 2006/2007 work programme, has a clearly defined path to production fromits two proven oilfields, has an exploration schedule to expand the reservebase, and has been admitted to the London AIM Market and Irish IEX Market. The basis for the success of any company are excellent projects, outstandingstaff and the ability to efficiently finance and execute its activities toprovide value for shareholders. These are now in place at PetroNeft and we canlook forward to an exciting future as we develop the company's assets. Operations - Licence 61, Tomsk Oblast, Russian Federation PetroNeft Resources plc, through its wholly owned Russian subsidiary Stimul-T,holds 100% interest in an exploration and production licence ("Licence 61") inthe Tomsk Oblast in Western Siberia. Licence 61 covers an area of 4,991 sq.kms., equivalent in size to approximately 24 UK North Sea blocks. Licence 61contains two proven oil fields, Lineynoye and Tungolskoye, that were discoveredby a State Exploration Enterprise in the early 1970s. The Company views Licence61 as a "Core Area", with oil production potential for a long period of timefrom both proven oil fields and other identified exploration prospects. Since acquiring Licence 61 the Company has reprocessed and reinterpreted 2,650line kms of previous 2D seismic data using modern technology. In addition thewell logs from 14 previous wells drilled on Licence 61 have been digitised andreinterpreted. The Company also acquired a further 515 line kms of 2D seismicdata in the winter season 2005/2006. All of this new, reprocessed andreinterpreted data was used by Ryder Scott Company Petroleum Consultants as thebasis for their reserve evaluation of Licence 61. Bringing all of the previous data on Licence 61 together into a cohesive andcomprehensive package, followed by, the acquisition and integration of newseismic data, has defined a clear programme of work into the future. Thisprogramme is designed to achieve both early production and the expansion ofrecoverable reserves through exploration. The work programme for the winter season of 2006/2007 has already commenced. Anew 500 line km 2D seismic survey is underway. The mobilisation of two drillingrigs began in February. Construction is underway to allow the drilling of adelineation well on the Lineynoye Oil Field beginning in January 2007. A secondwell, on the Tungolskoye Oil Field, will commence in February, and a third well,on the high potential West Lineynoye Prospect, estimated to contain 67 millionbbls of oil, will begin in May/June 2007. A full Production Feasibility Studyhas also commenced and will be completed in July 2007, when a decision tosanction the development project will be made. In addition to its activities to commercialise the existing discoveries onLicence 61, the drilling of the West Lineynoye Prospect also gives the Company arelatively low risk opportunity to triple its proved and probable reserve basefrom 33.5 million barrels to approximately 100 million barrels of oil. Theamount of leverage that this one well, drilled on the first of more than twentyseismically identified structures with significant hydrocarbon potential onLicence 61, could have on the Company's reserve base is rare for the industry.It further illustrates how eventful, and hopefully successful, the year aheadwill be for PetroNeft. While the Company's focus remains on the development of Licence 61, we continueto review other assets and projects that could enhance the Company's reservebase and operations. Admission to AIM & IEX markets As a private company prior to the recent placing and admission to trading on theAIM and IEX markets, PetroNeft raised a total of US$8 million. An additionalUS$15.5 million was raised at admission, which has put the company on a soundfinancial footing and provided funding for the next year of operations. It hastransformed the Company into one that has a strong institutional shareholderbase and sets the framework on which the future financing of the Company will beorganised. Outlook The first 18 months of our company's life has been an exciting time and the next12 months promises to be equally exciting. By July of 2007 it is hoped that thecompany will be able to take the decision to begin field and infrastructuredevelopment, leading to production in 2008. Taking an exploration asset likeours to start of production is not an easy task and requires considerableexpertise, hard work and team effort to do well. The company is fortunate tohave assembled an experienced management team that has successfully been thoughthis process many times both inside and outside of Russia. I would like to thank shareholders for their support of the company to date andlook forward to reporting on our progress over the coming months and years. G. David GolderChairman23 October 2006 Annual Report and notice of AGM The Company has sent its Annual Report, incorporating a notice of AGM, toshareholders. The AGM is convened to be held at Herbert Hotel, Dublin 4, Irelandat 11.00 am on Friday 10 November 2006. Pursuant to Rule 20 of the AIM and IEX Rules, a copy of the Annual Report isavailable for inspection, for a period of at least one month from the date ofthis announcement, at www.petroneft.com. Consolidated Income StatementInterim to 30 June 2006 (unaudited) (audited) 6 Months to Period ended 30 June 31 December 2006 2005 US$ US$ Turnover 25,262 - Administrative expenses (544,168) (241,331) Operating Loss (518,906) (241,331) Interest payable and similar charges (13,720) (19,083) Retained loss for the period (532,626) (260,414) Loss per shareBasic (0.49 c) (0.29 c) Consolidated Balance SheetAs at 30 June 2006 (unaudited) (audited)(unaudited) As at As at 30 June 31 December 2006 2005 US$ US$Non-Current assetsProperty, plant and equipment 263,997 169,937Other intangible assets 8,334,053 6,093,657 8,598,049 6,263,594 Current AssetsTrade and other receivables 1,980,116 451,323Cash and cash equivalents 2,836,407 256,208 4,816,523 707,531 Total Assets 13,414,572 6,971,125 Equity and Liabilities Capital and ReservesCalled up share capital 1,605,845 1,052,260Share premium account 12,137,363 4,861,880Profit and loss account (793,040) (260,414) Equity attributable to equity holders of the parent 12,950,169 5,653,726 Current LiabilitiesTrade and other payables 464,403 1,317,399 Total Liabilities 464,403 1,317,399 Total Equity and Liabilities 13,414,572 6,971,125 Cash Flow StatementInterim to 30 June 2006 (unaudited) (audited) 6 Months to Period ended 30 June 31 December 2006 2005 US$ US$ Net loss before interest and income tax (518,906) (241,331) Adjustments for:Depreciation for - Property, plant and equipment 5,451 910 Operating profit before working capital changes (513,455) (240,421) Increase in trade receivables (1,528,793) (451,323)(Decrease)/Increase in trade payables (852,996) 1,317,399 Cash generated from operations (2,895,243) 625,655 Interest paid (13,720) (19,083) Net cash flow from operating activities (2,908,963) 606,572 Investing activitiesPurchase of Property, plant and equipment (99,510) (170,847)Purchase of other intangible assets (2,240,396) (6,093,657) Net cash used in investing activities (2,339,906) (6,264,504) Cash flows from financing activities Proceeds from issue of share capital 7,829,069 5,914,140 Net cash received from financing activities 7,829,069 5,914,140 Net increase in cash and cash equivalents 2,580,199 256,208 Cash and Cash equivalents at the beginning of the period 256,208 Cash and Cash equivalents at the end of the period 2,836,407 256,208 Notes to the Interim Statement • The results for the six-month period ended 30 June 2006 are not audited nor reviewed. • The financial information has been prepared on a consistent basis and using the same accounting policies as the audited financial statements for the year ended 31 December 2005. Forward Looking Statements This announcement contains forward-looking statements. These statements relateto the Company's future prospects, developments and business strategies.Forward-looking statements are identified by their use of terms and phrases suchas "believe", "could", "envisage", "potential" "estimate", "expect", "may", "will" or the negative of those, variations or comparable expressions, includingreferences to assumptions. The forward-looking statements in this announcement are based on currentexpectations and are subject to risks and uncertainties that could cause actualresults to differ materially from those expressed or implied by thosestatements. These forward-looking statements speak only as at the date of thisannouncement. End 23 October 2006 This information is provided by RNS The company news service from the London Stock Exchange