Rift Helium Regulatory News (RIFT)

19 Dec 2008 07:00



Rift Oil PLC

 ("Rift" or the "Company")

Interim Results for the six months ended 30 September 2008

Rift Oil PLC (AIM : RIFT), the oil and gas exploration company with assets in Papua New Guinea, is pleased to announce its interim results for the six months ended 30 September 2008.

Summary of key points:

Near tripling of unrisked mid-case gas prospective resources 

Completion of 215km of seismic proving structures larger than anticipated

Drilling of new well scheduled for early 2009

Continuing negotiations with potential commercialisation partners

Cash position as at 30 September 2008 £3.3million

Chairman, Ian Gowrie-Smith said:

"Rift Oil Plc has had an exceptionally successful half year with the near tripling of unrisked mid-case gas prospective resources following the successful testing at the Puk Puk-1 exploration well. The combination of success in all the wells, the flow rates, the quality of gas and the analysis of the seismic make us very confident that we have a gas resource of substantial proportions which should lend itself to early commercialisation."

Peter Mikkelsen FGS, AAPG, meets the criteria of a qualified person under the AIM guidance note for mining, oil and gas companies and has reviewed and approved the technical information contained in this announcement.

For further information please contact: 

Chairman's Statement

Rift Oil Plc has had an exceptionally successful half year with the near tripling of unrisked mid-case gas prospective resources from approximately 800 bcf to in excess of 2.2 tcf. This followed from the discovery of three pay zones in the Puk Puk-1 exploration well, yielding a net pay over 45 metres and a combined flow rate of 71mmcf per day.  Just as importantly, analysis of the recently acquired 215 km of seismic indicated that within PPL235, the structures are larger than previously estimated with clear signatures similar to the discoveries of Douglas and Puk Puk. The combination of success in all the wells, the flow rates, the quality of gas and the analysis of the seismic make us very confident that we have a gas resource of substantial proportions which should lend itself to early commercialisation.

During 2007 and early 2008, Rift had been concentrating on the prospect of supplying Alcan with about 40 bcf per year, but in more recent times we have shifted our focus to the liquefied natural gas ("LNG") market. The tripling of possible resources now makes a committed field limited to only 40 bcf per annum economically unattractive, compared to annual production of closer to 100bcf if we proceed with the Floating LNG option ("FLNG"), which could see an output of some 1.5m tons of LNG per annum. Rift has continued to work very closely with FLEX LNG, with whom Rift signed a heads of agreement in June of this year, with regard to exploiting Rift's gas resources by conversion to LNG on a floating LNG vessel. FLEX LNG is due to commence construction of its first FLNG ship during late 2009. Rift's gas discoveries are ideal for FLNG as they are located relatively close to the coast and also near deepwater for tanker access. Rift and FLEX have commissioned a pipeline and feasibility study to establish the best route from the field to the proposed location for the FLNG ship.

The Minister for Petroleum for Papua New Guinea ("PNG") has been most supportive of the project. A spur pipeline could also be built to the coastal community of Daru in due course if demand is sufficient. The support of PNG Sustainable Development Programme ("PNGSDP") will be sought for the onshore section of pipeline and field development. PNGSDP has in excess of $1 billion in funds set aside for sustainable development in PNG and of that, one third is reserved for the western province, which is where Rift's gas resources are located. PNGSDP has already expressed great enthusiasm for the aggregation of gas discoveries in the western province for development.

Unusually for a junior company, Rift Oil owns 100% of the licences PL235 and PPL261, having purchased the minority partner interest prior to the drilling and seismic work of the last six months.  This means that we are well placed to determine our own future in terms of the development  and commercialisation of our gas resources.

Rift has retained the services of its Nomad RBC Capital Markets and Sydney based RFC to conduct a formal process to establish with whom and on what terms Rift can gain a partner/investor to expedite the rapid exploitation of our discoveries. This process is expected to be completed in early 2009.  The Directors are encouraged with the response especially from Japanese and Korean companies.  

Rift hopes to commission site clearance for the next exploration well called Platypus (formally known as Douglas NW but now mapped as a separate large structure between Douglas and Puk Puk) for drilling in early 2009.  Subsequent wells, designed to ultimately establish 1P reserves sufficient to commit to a FLNG ship, will follow. Reserves of this dimension should see the commercialisation comfortably covered by project financing.

Luckily for Rift, steel prices, which constitute one of the biggest costs of a pipeline, have dropped dramatically, while onshore drilling costs are also easing. It is a very exciting time for Rift and our thanks go to our shareholders and employees for their support and efforts. 

Ian Gowrie Smith

Chairman

19 December 2008

RIFT OIL PLC

  RIFT OIL PLC

Basis of preparation

The unaudited consolidated interim financial information is for the six month period ended 30 September 2008. The financial information has been prepared in accordance with the accounting policies which are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) and are effective at 31 March 2009 or are expected to be adopted and effective at 31 March 2009. The interim financial information does not include all of the information required for full annual financial statements.

The interim financial information has not been audited nor has it been reviewed under ISRE 2410 of the Auditing Practices Board. The financial information set out in this interim report does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The Group's statutory financial statements for the year ended 31 March 2008 prepared under IFRS have been filed with the Registrar of Companies. The auditors report on those financial statements was unqualified and did not contain a statement under Section 237(2) of the Companies Act 1985.

The Interim accounts have been posted to shareholders and are available from the Company's website at www.riftoil.com